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V3283-16 13 July 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · doble imposición interna

A partial deduction may be applied to dividends corresponding to the premium on the acquisition of shareholdings

A holding company inquires regarding the application of the deduction for domestic double taxation on dividends from company Y. The DGT explains how to apply the transitional regime of the CIT when the previous seller applied deductions for reinvestment or double taxation.

The question raised

Question raised 1. Application of the deduction to avoid domestic double taxation under Article 30.6 of the consolidated text of the Corporate Income Tax Law to the dividends distributed by Y in the 2013/2014 and 2014/2015 fiscal years.

The DGT's ruling

For dividends corresponding to the premium paid in the acquisition of shareholdings, a proportional rule shall apply. The entity shall be entitled to an 18% deduction on the portion of the dividend linked to income that benefited from the deduction for reinvestment of extraordinary profits in the transferring entity. Likewise, it shall be entitled to a 100% deduction of the gross tax liability on the portion of the dividend corresponding to income that did not benefit from either of the two aforementioned deductions. This regime is applicable provided that the acquisition occurred in periods starting before January 1, 2015.

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