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V2568-21 21 October 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención de rentas

Exemption possible in transfer of shares under participation and residency requirements

A company inquired whether rental income from the transfer of shares in two Spanish resident entities is exempt. The DGT states that exemption applies if participation and residency requirements are met, except where the entities are patrimonial.

The question raised

Whether the potential income that the consulting entity might obtain from the transfer of entities X and X1 would be exempt in accordance with Article 21.3 of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

The exemption under Article 21.3 of the LIS applies if at least 5% of the capital or a value exceeding 20 million euros is held uninterruptedly. In the case of entities resident in Spain, compliance with the requirement of taxation abroad is not required. However, if the participated entities are considered holding companies, the exemption shall not apply to the portion of the income that does not constitute an increase in undistributed profits.

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