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Special exemption scheme – dividends in Spain

dividends in SpainWhen a directly owned enterprise has the status of holding company according to the exemption scheme to avoid double taxation, the income from which dividends in Spain are distributed must meet the “minimum tax” requirement.

 

 

 

Exemption – dividends in Spain

Article 21 of the Company Tax Law stipulates an exemption to dividends in Spain if the companies comply with certain requirements:

If the investee obtains dividends in Spain, profit shares or income derived from the transfer of shares representing the capital or own funds of companies, which amount more than 70% of its income, the application of this exemption on this income will require the contributor to have an indirect share in these entities that meets the above-mentioned requirements.

There is an additional requirement for the case of shares in entities not domiciled in Spain:

Summary – dividends in Spain

The Corporate Income Tax Law establishes a series of exemptions to prevent companies or entities subject to Tax in Spain from paying tax twice on the same income (for example, the dividends in Spain) if they have already done so abroad.

Bettina Náray

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