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V2785-23 13 October 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · neutralidad fiscal

Fiscal neutrality possible for share contributions and dividend exemptions under conditions

Societies inquire whether contributions of shares in a holding company to new entities may benefit from special fiscal neutrality and whether dividends from such structures are exempt under Corporate Tax. The DGT confirms this is possible if participation requirements are met and there is no fraud intent, and dividends may be exempt under Article 21 of the LIS.

The question raised

Regarding Corporate Income Tax:

The DGT's ruling

The contribution of shares may qualify for the tax neutrality regime if the requirements of residence, minimum 5% participation, and uninterrupted ownership during the previous year are met. Dividends may be exempt from Corporate Income Tax if the 5% participation threshold and the required holding period are met, taking into account the subrogation of securities and acquisition dates. Regarding Wealth Tax, financial investments resulting from the sale of assets are not considered non-business assets, but their use for economic activity must be assessed by the Administration.

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