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V4968-16 16 November 2016 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · impuesto sobre el patrimonio

Spain may tax Norwegian residents' patrimony via indirect ownership of Spanish real estate

A Norwegian resident asks whether they may be subject to Spain's Wealth Tax by indirectly owning a Spanish company whose assets are real estate. The DGT responds that, under the Spain-Norway Convention, taxation applies if there is substantial participation or if the company's assets are primarily real estate.

The question raised

Taxation in Wealth Tax. Application of the Double Taxation Convention with Norway.

The DGT's ruling

The Convention with Norway allows for the taxation of wealth consisting of shares in a company whose assets consist totally or mainly of real estate in the State where the asset is located. The absence of the mention "directly or indirectly" in the text of the Convention does not prevent its application to indirect ownership, as said expression only clarifies what is already implicit in the concept of participation. Therefore, the real obligation to tax applies if the requirements of substantial participation or principal real estate assets are met.

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