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V3029-14 5 November 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · doble imposición interna

Pending double taxation deduction cannot be transferred to shareholders upon company dissolution

A company has requested clarification on whether it can apply a pending double taxation deduction from a company undergoing dissolution. The Directorate General for Taxes (DGT) has ruled that the dissolution of a company results in the extinction of its right to claim such deductions.

The question raised

Whether company A can apply the aforementioned pending double taxation deduction due to insufficient tax liability generated by the dissolved company B.

The DGT's ruling

The dissolution of entity B determines its extinction and, with it, the extinction of its right to deduct the amounts from the double taxation deduction under Article 30.3 of the TRLIS not deducted due to insufficient tax liability. This right cannot be transferred to entity A or to any other partner of entity B, as there is no subrogation in the application of said deduction.

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