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V2374-21 20 August 2021 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención

Requirements for Wealth Tax exemption on holdings in entities

The taxpayer asks whether the exemption for holdings in entities can be applied within a holding structure and its subsidiaries. The DGT rules that it is only applicable to the specific entity where the requirements for shareholding percentage and management remuneration are met, excluding indirect holdings.

The question raised

Whether there is a right to apply the exemption in Wealth Tax in the various entities in which it participates directly and indirectly.

The DGT's ruling

To access the exemption, the taxpayer must fulfill three requirements: that the entity does not primarily manage movable or immovable property, that its participation is at least 5% individually or 20% jointly, and that it performs management functions with remuneration exceeding 50% of its income. Indirect holdings are not considered for the fulfillment of the capital and management requirements, as the exemption requires direct ownership of the holdings. The exemption only applies to the portion of the value of the holdings proportional to the assets necessary for the business activity.

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