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V3061-20 13 October 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · actividad económica

Exemption on the transfer of shares may apply if the investee entity carries out an economic activity

A query was raised regarding whether a company can apply the exemption for the sale of shares in an entity that rents out properties. The DGT indicates that if the investee entity carries out an economic activity, it will not be considered a patrimonial entity and the exemption may be applied.

The question raised

1. In the described scenario, given the circumstances presented, whether the group classification is applicable, with reference to Article 42 of the Commercial Code, to company P as the parent company and to the described companies as investee companies.

The DGT's ruling

In order for the investee entity not to be considered a patrimonial entity in the leasing of real estate, it must employ at least one person under an employment contract on a full-time basis. If this economic activity requirement is met, entity P may apply the exemption provided in Article 21 of the LIS to the transfer of its holdings in entity B, provided that the requirements regarding ownership percentage and holding period are met. If entity B were a patrimonial entity, the exemption would not apply to the portion of the income that does not correspond to undistributed profits.

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