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V3733-15 25 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · doble imposición interna

Internal double taxation relief on dividends may apply if prior taxation on capital gains is proven

A company has requested clarification on whether it can apply internal double taxation relief to dividends distributed in 2014. The Directorate General for Taxes (DGT) has ruled that this is possible provided it is demonstrated that an amount equivalent to the dividend was previously taxed in Spain following the transfer of shares.

The question raised

Question posed: Whether the deduction to avoid double taxation regulated in Article 30.6 of the TRLIS is applicable to the dividend distribution carried out in the 2014 fiscal year.

The DGT's ruling

Article 30.6 of the TRLIS allows for the non-inclusion of the dividend in the tax base if it is proven that the equivalent amount was taxed at the level of the previous transferors. If the transferors were companies, the deduction shall be 30% (or 18% if there was reinvestment of extraordinary profits). If they were natural persons, the deduction shall not exceed the tax rate applicable to capital gains in the IRPF. This deduction may be applied to the total tax liability of the tax group if the entity is part of one.

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