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V3204-21 23 December 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · exención de dividendos

Dividends exempt under art. 21 LIS not subject to withholding if conditions met

A asset management entity asks about the treatment of exempt dividends, deductibility of expenses and withholding obligations. The DGT clarifies that a 5% management expense reduction does not prevent exemption for non-residents, and no withholding is required if exemption conditions are met.

The question raised

Several questions are raised which are described in the body of the response.

The DGT's ruling

The 5% reduction for management expenses in the exemption under Article 21 LIS does not prevent the application of the non-subjectivity under Article 108.1.c) for non-residents. Dividends that meet the requirements of Article 21 LIS are not subject to withholding tax under Corporate Income Tax. Financial expenses are deductible provided they meet the legal requirements and are not considered non-deductible under Articles 15 and 15 bis LIS, respecting the limit of 30% of the operating profit.

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