Limitation to 95% of the exemption foreseen in article 21 of the LIS.

07/01/2021

By means of Law 11/2020, of December 30, on General State Budgets for the year 2021, a series of modifications have been introduced in the Corporate Income TaxLaw, mainly affecting the treatment that article 21 of the aforementioned Law gave the Exemption on dividends and income derived from the transfer of shares representing the own funds of resident and non-resident entities in Spanish territory.

Effective January 1, the amount of dividends and profit shares and income derived from the transfer of shares will be reduced by 5% as management expenses, for the purposes of applying the measures designed to avoid double taxation, this means that in the end the amount of dividends and income derived from the transfer of shares will be reduced by 5% in respect of non-deductible management expenses; which reduces the effective exemption to 95%.

It should be noted that entities whose net amount of turnover during the immediately preceding fiscal year is below 40 million euros will not be affected, temporary, by this limitation, where dividends are distributed, provided that they meet a series of requirements, being the more relevant, in our opinion, that the investee company must have been incorporated after January 1, 2021 and, since its constitution, it must be fully owned, directly or indirectly, by the recipient of the dividends.

This measure, although it is not contrary to European regulations, does involve double taxation that will have to end up being assumed by the entity receiving the dividend or the transferor of the shares.

Formulario de contacto

Categorias

Most popular articles

donación de padre a descendiente

Donaciones de padres a hijos en Madrid

Como abogados expertos en herencias y donaciones hemos preparado este conteni…

Limitation to 95% of the exemption foreseen in article 21 of the LIS.

By means of Law 11/2020, of December 30, on General State Budgets for the year...

VAT refund to entrepreneurs established in the United Kingdom of Great Britain and Northern Ireland

El 5 de enero de 2021 se ha publicado Resolución de la Dirección General de …
© DTY Asesores. All rights reserved. Web development Estrategia de Marketing online Madrid.