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V2345-16 26 May 2016 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención

Family business exemption for Wealth Tax may apply if legal requirements are met

A query was raised regarding the applicability of the 'family business' exemption for Wealth Tax in relation to a limited company. The Directorate General of Taxes (DGT) clarifies that, although there is no specific legal concept of a 'family business', the exemption depends on strict compliance with the statutory requirements regarding activity, shareholding, and remuneration.

The question raised

Applicability of the exemption from Wealth Tax regarding "family business".

The DGT's ruling

The exemption from Wealth Tax requires that the entity's primary activity is not the management of movable or immovable property. The taxpayer must hold at least a 5% stake individually or a 20% stake together with their family group. Furthermore, they must perform management functions receiving remuneration exceeding 50% of their business, professional, and personal labor income.

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