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V2528-14 29 September 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención de dividendos

Requirements for exemption from dividend and capital gains tax for non-resident entities

A Spanish company asks whether it can apply the exemption under Article 21 of the TRLIS to dividends and capital gains from a foreign entity (H), whose profits may indirectly arise from other subsidiaries. The DGT explains that exemption is possible if the percentage ownership, foreign tax liability, and the profits derive from commercial activities are met.

The question raised

Whether the exemption provided for in Articles 21.1 and 21.2 of the consolidated text of the Corporate Income Tax Law is applicable to the dividends and capital gains, respectively, obtained by the taxpayer and derived from its participation in H, even if such income may originate, through E, from dividends and increases in value attributable to the Investee Companies.

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