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V2087-20 23 June 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención de dividendos

Dividends from a subsidiary may be exempt if minimum holding period is met

A Spanish company asks whether dividends from its subsidiary B (10% ownership) are exempt under Corporate Tax. The DGT states that, since the ownership exceeds 5% and the subsidiary is resident in Spain, exemption depends on meeting the minimum holding period requirement.

The question raised

Whether the exemption provided for in Article 21 of Law 27/2014, of November 27, on Corporate Income Tax, is applicable to the dividends distributed by subsidiary entity B to the consulting entity.

The DGT's ruling

To apply the exemption under Article 21.1 of the LIS, the requirement of a significant holding of at least 5% must be met. In this case, the 10% holding meets the percentage requirement, but the exemption shall be conditional upon holding said participation uninterruptedly during the year prior to the date on which the benefit becomes due or maintaining it subsequently to complete said period.

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