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V2132-19 13 August 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención

Profit distribution from a transfer between partners does not prevent Corporation Tax exemption

A company inquired whether distributing profits obtained from the sale of a stake in another company as dividends would affect tax exemption. The DGT ruled that the exemption remains valid provided that the requirements for participation and holding are met.

The question raised

Whether the distribution of profits obtained by the taxpayer in the transfer of the shareholding among all its individual shareholders, in the form of dividends, could result in the loss of the exemption provided for in Article 21.3 of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

The entity may apply the exemption provided in Article 21 of the Corporate Income Tax Act regarding income derived from the transfer of its shareholding, provided that the requirements of significant participation and uninterrupted holding are met. The subsequent distribution of said profits among the shareholders of the consulting entity does not preclude the application of the exemption.

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