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V3419-16 19 July 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · usufructo

Usufructuaries may apply dividend exemption if requirements of Article 21 LIS are met

A query was raised regarding whether an entity holding the usufruct of shares can apply the dividend exemption and how payments related to this right should be treated. The DGT ruled that the usufructuary is the economic shareholder entitled to the exemption and that usufruct payments are deductible if recorded as an expense in the accounts.

The question raised

1) Whether the exemption provided in Article 21 of the LIS applies to the dividends received and to the express reserves accumulated during the usufruct, received by the applicant as a consequence of the usufruct formalized over 25% of the shares of B.

The DGT's ruling

The usufructuary may apply the exemption provided in Article 21.1 of the LIS provided that the requirements of participation and holding period are met, as they are the economic shareholder receiving the dividends. Payments made to acquire the right of usufruct are tax-deductible in Corporate Income Tax if they are accounted for as an expense for the fiscal year following the ICAC criteria. The amounts received by the usufructuary must be included in their personal income tax (IRPF) taxable base.

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