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V2433-23 7 September 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención de renta positiva

Exemption from positive income possible on share sale if conditions met

A company asked whether the sale of a 10% stake in a Spanish resident entity could qualify for exemption from positive income. The DGT confirms this is possible provided the requirements on shareholding, holding period, and absence of legal exclusions are met.

The question raised

Question posed: Whether, if a sale of 10% of said shares is made to the interested party, the provisions of Article 21 of Law 27/2014, of November 27, on Corporate Income Tax would apply, namely, the exemption of the positive income derived from the transfer of the participation in an entity in which more than 5 percent is held.

The DGT's ruling

The positive income from the transfer of shares shall be exempt if the minimum participation percentage of 5% and the uninterrupted holding period of one year are met. In the case of entities resident in Spain, it is not necessary to meet the requirement of taxation abroad. The exemption shall apply provided that the exclusions in paragraphs 4 and 5 of Article 21 of the LIS do not occur. The exempt amount shall be reduced by 5% for management expenses.

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