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V3440-15 11 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidad de reducida dimensión

The possibility of applying small entity incentives depends on not being classified as a patrimonial entity

The inquiry asks whether an entity may benefit from small entity incentives and whether it may declare received dividends as exempt. The DGT responds that the classification as a patrimonial entity depends on the average of the group's consolidated balance sheets and that dividends from a resident entity satisfy the participation requirement.

The question raised

Question posed: Whether the inquiring entity carries out an economic activity and, in such a case, whether it could benefit from small entity incentives.

The DGT's ruling

To apply small entity incentives, the entity must not be a patrimonial entity, which occurs if more than half of its assets consist of securities or elements not used for economic activity. If the entity is a parent company of a group, the average of the quarterly consolidated balance sheets must be analyzed. Regarding dividends, the exemption under Article 21 of the LIS applies if the participation percentage is met and legal exclusions do not apply.

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