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V2335-20 8 July 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención por doble imposición

Doubtful tax exemption for transfer of shares in non-resident entities

A rural cooperative asks whether gains from selling shares in two non-resident companies (in the Netherlands and UK) are exempt from corporate tax. The DGT confirms the exemption may apply if article 21 of the LIS is met, though it clarifies that such income is considered extracooperative.

The question raised

Question raised 1. Whether the income obtained from the transfer of the holdings would be 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

The entity may apply the exemption under Article 21 of the LIS if it meets the requirements of a minimum 5% participation and uninterrupted holding, in addition to the minimum taxation in the country of residence of the subsidiaries. Notwithstanding, the returns derived from holdings in non-cooperative companies are considered extra-cooperative income pursuant to Article 21 of Law 20/1990, regardless of the activity carried out by the subsidiaries.

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