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V4402-16 14 October 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · etve

Dividends and capital gains from a Spanish ETVE may be exempt if LIS conditions are met

A Belgian resident enquires about setting up a Spanish ETVE to manage a stake in Cuba. The DGT examines the taxation of dividends and capital gains from the Cuban ETVE and the subsequent distribution of these profits to Belgian shareholders.

The question raised

1) Whether the special tax regime for foreign security holding companies, regulated in Chapter XIII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, would be applicable to the described entity.

The DGT's ruling

Dividends from the Cuban company may be taxed in Spain and in Cuba subject to the limits set forth in the Spanish-Cuban Convention. Dividends distributed by the ETVE to non-resident partners shall not be deemed to have been obtained in Spain if the requirements of Article 108.1 of the LIS are met. Capital gains from the transfer of the interest in the ETVE shall also not be deemed to have been obtained in Spain if the requirements of Article 108.2 of the LIS are met.

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