Skip to content
Back to index
V2680-20 2 September 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción en la base imponible

95% tax reduction cannot be applied to the donation of a partial interest in a pharmacy

A son inquired whether he could apply the 95% reduction to the taxable base when receiving a partial donation (40%) of his father's pharmacy. The Directorate General for Taxes (DGT) ruled that this is not possible, as the reduction requires the global transfer of the business or enterprise.

The question raised

Whether the application of the reduction in the tax base regulated in Article 20.6 of Law 19/1987 on Inheritance and Gift Tax is possible for the proposed donation.

The DGT's ruling

The 95% reduction provided for in Article 20.6 of the LISD requires the inter vivos transfer of the sole proprietorship, the professional business, or the shares as a whole. As a partial donation of the pharmacy and the formation of a community of property with the donor are intended, the requirement to transfer the economic activity considered as a unit is not met. Therefore, the projected operation cannot benefit from said reduction.

Book your free first meeting