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V2114-19 12 August 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · actividad económica

Exemption on the transfer of shares does not apply to income generated while the entity is classified as a holding company

The query examines whether a company carries out economic activity when it subcontracts the necessary means, and how this affects the exemption on the transfer of shares. The DGT determines that if the entity is classified as a holding company during certain periods, the exemption only applies to the portion of income that does not correspond to undistributed profits generated during those periods.

The question raised

Whether companies C and D carry out an economic activity falling within Article 5.1 of the LIS, with company C meeting the requirements indicated for the purpose of determining that the entity carries out an economic activity, even if the material and human resources necessary to intervene in the market are not its own but are subcontracted to company D.

The DGT's ruling

For economic activity to exist in the leasing of real estate, at least one person with an employment contract and full-time working hours must be employed. If an entity is a holding company (more than half of its assets are not used for economic activity), the exemption under Article 21.3 of the LIS shall not apply to the portion of the capital gains income that does not correspond to an increase in undistributed profits generated during the holding period. If the status of a holding company is only met during certain periods, the exemption shall apply proportionally according to the tax periods.

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