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V2717-19 4 October 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención

Exemption on the transfer of shares may apply if Article 21 LIS requirements are met

A company has requested clarification on whether the sale of a stake exceeding 5% in a non-patrimonial entity is exempt from Corporate Income Tax. The DGT indicates that the exemption depends on meeting the minimum shareholding percentage and the continuous holding of the shares.

The question raised

Whether the exemption provided for in Article 21 of Law 27/2014, of November 27, on Corporate Income Tax, is applicable to the aforementioned transfer.

The DGT's ruling

In order for the positive income from the transfer of a shareholding to be exempt pursuant to Article 21.3 of the LIS, the participation requirements of paragraph 1 must be met. It is required to hold at least 5% of the capital or equity continuously during the year prior to the transfer. As the transferred entity is a resident in Spain, the requirement for taxation abroad does not apply.

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