Corporation Tax Law:

Article 21.3 of the Corporate Tax Law has extended to the transfer of shares of Spanish subsidiaries the previously existing regime of non-taxation of profits obtained from the sale of foreign subsidiaries. With effects of the 1 day of January of 2015 this exemption is conditioned to the fulfillment of the following requirements:

  1. The percentage of participation, direct or indirect, in the capital or equity of the entity is, at least, of 5% or that the acquisition value of the participation exceeds 20 million euros.
  2. Participation must be owned uninterruptedly during the day prior to transmission year.
  3. In addition, in the case of equity investments in non-resident in Spain, it is required that the investee has been subject to and not exempt for foreign tax similar to income tax at a nominal rate of at least 10% . It is deemed to meet this requirement, if the investee is resident in a country with which Spain has signed an agreement to avoid double taxation and contain information exchange clause.

The same scheme exemption applies to income earned in the event of liquidation of the investee, partner separation, merger, capital reduction, non-monetary contribution or the transfer of assets and liabilities. the exemption should also apply to the alleged distribution of share premium reserve by an investee.


the exemption mentioned that part of the income derived from the transfer of participation, direct or indirect holding in an entity that is treated as a patrimonial entity shall not apply (the term patrimonial entity that in which more than half of its assets are made by values ​​or are not related to an economic activity).


About the Author:

Xavier Vales DiG barcelona Lawyers tax

Xavier Vales

DiG Lawyers

Linkedin