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V2417-17 27 September 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · transmisiones lucrativas

Potential for donation tax reductions and IRPF exemptions under economic activity requirements

A query was raised regarding whether exemptions from Wealth Tax are maintained following an initial donation of company shares, and whether a subsequent donation allows for reductions in Gift and Inheritance Tax (ISD) and exemptions in Personal Income Tax (IRPF). The DGT indicates that Wealth Tax exemptions and ISD reductions depend on the assets being tied to economic activities and the fulfilment of management and remuneration requirements.

The question raised

Whether, once the first donation has been carried out, the social shares could be considered exempt from Wealth Tax. Furthermore, it is inquired whether the reduction provided for in Article 20.6 of the Inheritance and Gift Tax Law would be applicable to the second donation, as well as the provisions of Article 33.3.c) of the Personal Income Tax Law.

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