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V3102-23 28 November 2023 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención

Requirements for Wealth Tax exemption on shareholdings: economic activity, ownership, and management functions

A taxpayer inquired whether they could apply for a Wealth Tax exemption on their shareholdings following a securities exchange. The Directorate General for Tax (DGT) ruled that the requirements regarding economic activity, percentage of ownership, and management functions established by law must be met.

The question raised

In the scenarios presented (development of new activities directly by entity x or indirectly through participated companies), if the requirements demanded in the Wealth Tax regarding management, participation, economic perception, etc., are met, would the exemption provided for in Article 4. Eight. Two of Law 19/1991 be applicable?

The DGT's ruling

To apply the exemption under Article 4. Eight. Two of the LIP, the entity must not have the management of movable or immovable property as its main activity. Holdings in companies that grant at least 5% of the voting rights shall not be counted as securities if they are held to direct and manage the holding with material and personal means. In the case of real estate leasing, this shall only be considered an economic activity if at least one person is employed under a full-time employment contract. Furthermore, the minimum capital participation must be met and management functions must be exercised with the corresponding remuneration.

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