Doctrine by topic · DGT Observatory
How the DGT's position on this topic has evolved, and the rulings it rests on.
Current position
To apply the reductions of the LISD (Law on Business Succession), it is a necessary condition that the holdings enjoy the exemption from Wealth Tax. This exemption requires that the entity does not manage movable or immovable assets, which occurs if more than half of the assets are not used for economic activities for more than 90 days. In cases of substitution of holdings, the value of the reduction and the right to the exemption must be maintained over the new elements.
The DGT's position remains constant in requiring the Wealth Tax exemption as a prerequisite for the LISD reductions. Throughout the rulings, the application of this requirement has been clarified in cases of donations, inheritances, and substitution of holdings. No changes in criterion are observed, but rather a repeated application of the current regulations.
Turning points
Clarifies that for the reduction under article 20.2.c), it is not necessary for the heirs to have been holders of the shares prior to the death.
Establishes that the contribution of donated holdings to another entity does not breach the maintenance requirement, provided that the value of the reduction and the right to the exemption in the substitute holdings are preserved.
Analysis based on 16 of 17 rulings with a stated position. Updated 25 September 2026.