Skip to content
Back to index
V2100-20 23 June 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención

Exemption applies only to undistributed profits if the holding company is a patrimonial entity

A company asks whether positive income from the sale of its stake in another company may be exempt. The DGT states that if the holding company is a patrimonial entity, the exemption applies only to the portion corresponding to undistributed profits generated during the holding period.

The question raised

Whether the requirements are met so that the positive income that could be manifested in the transferring company as a consequence of the transfer of its participation in company B would be exempt in accordance with the provisions of Article 21.3 of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

For income from the transfer of shares to be exempt, a minimum percentage of participation must be met and, if the entity is a non-resident, a requirement of taxation abroad. If the investee entity is a holding company, the exemption shall only apply to the portion of the income corresponding to an increase in undistributed profits generated during the period of ownership of the participation.

Book your free first meeting