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V3230-14 1 December 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · etve

ETVE regime applicable to societies with indirect holdings via instrumental entities

A consulting company asks whether it can apply the Foreign Holdings Entity (ETVE) regime and how its subsidiary structure affects this. The DGT responds that it is possible if the social object and nominal character requirements are met, even with indirect holdings or through intermediate entities.

The question raised

1. Whether entity A can qualify for the special tax regime for Foreign Holding Companies.

The DGT's ruling

To qualify for the ETVE regime, the entity must have in its corporate purpose the management and administration of securities representing the equity of non-resident entities, through material and personal means. The securities must be registered, a requirement met by holdings in limited liability companies through the shareholder register. The existence of indirect holdings through instrumental sub-holdings does not prevent the application of the regime. Furthermore, the regime applies from the first day of the tax period in which the option is made, even if the communication is subsequent.

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