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V2760-15 24 September 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención de dividendos

Entity may benefit from exemption on share transfer if conditions met

The DGT confirms that an entity may benefit from the exemption in share transfers without triggering the restriction in paragraph 4.a) of article 21 of the LIS, provided the percentage ownership and tax residency or residence conditions of the involved entities are met.

The question raised

Question posed: Whether entity B may benefit, at the time of the transfer of its interest in E, from the exemption provided in Article 21 of the Corporate Income Tax Law, without the restriction in paragraph 4, letter a), of the aforementioned article being applicable.

The DGT's ruling

The entity may apply the exemption provided in Article 21 of the LIS regarding income from the transfer if it transfers at least 5% of the investee entity, held uninterruptedly during the previous year. The restriction in paragraph 4.a) shall not apply if the holding in the transferring entity consisted of at least 5% held uninterruptedly during the year prior to the contribution, and said entity were resident in Spain or were subject to an analogous foreign tax of at least 10%.

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