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V2519-20 23 July 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención de rentas positivas

Holding period of an individual cannot be counted towards tax exemption on the transfer of shares

A query was raised regarding whether the period during which an individual shareholder held certain shares could be added to the company's holding period to meet the minimum one-year requirement. The Directorate General for Taxes (DGT) ruled that this is not possible, as such a period is only counted if the shares were held by other entities within the same group.

The question raised

1. Whether the sole shareholder and the requesting company can be considered constituent entities of the same group under Article 42 of the Commercial Code, and consequently, whether the capital gain obtained in the sale on May 05, 2017, would be exempt.

The DGT's ruling

For the exemption of positive income from the transfer of shares (Art. 21.3 LIS), the minimum one-year holding requirement must be met on the date of the transfer. The calculation of the period only allows for the inclusion of the time during which the shareholding was held uninterruptedly by other entities that form part of the same group according to the Commercial Code. Therefore, the holding period of a natural person is not computable for this requirement.

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