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V2265-21 12 August 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención

Exemption applies only to undistributed profit growth for patrimonial entities

An entity asks whether capital gains from selling shares in another company are exempt from corporate tax. The DGT states that since the subsidiary has not carried out any economic activity, it is a patrimonial entity, and the exemption only covers growth in undistributed profits.

The question raised

Whether the capital gain obtained from the sale of said social shares is exempt from Corporate Income Tax in accordance with the provisions of Article 21 of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

For the transfer of shares to be exempt, the requirements of significant participation and holding must be met. If the investee entity is a holding company, the exemption does not apply to the portion of the income that is not an increase in undistributed profits generated during the holding period. An entity is considered a holding company if its assets consist mostly of securities or if it is not engaged in an economic activity. Preparatory actions for an activity do not constitute its material commencement.

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