Skip to main content
Economic Activities Manual. Fiscal duties of employers and resident professionals in Spanish territory

4.4.1 Exemption

In order to avoid double taxation, the regulations have the measures regarding the exemption method: 

  1. The exemption method to avoid internal and international double economic taxation on dividends and income derived from the transfer of securities representing the capital of entities, both resident in Spanish territory and abroad. 

  2. The exemption method to avoid international legal double taxation on income obtained abroad through permanent establishments 

    Law 27/2014 on Corporate Tax incorporates a general exemption regime for significant holdings, applicable both domestically and internationally, eliminating in the latter area the requirement relating to the performance of economic activity, although a minimum tax requirement is incorporated which is set at a nominal rate of 10%, this requirement being understood to be met in the case of countries with which an Agreement has been signed to avoid international double taxation.

    As of January 1 2021, in order to understand what a significant participation is, the alternative that the acquisition value of the participation be greater than 20 million euros is eliminated and the amount that will be exempt will be % of said dividend or .This limitation will NOT apply to companies with a net turnover of less than 40 million euros and which are not part of a business group, for a period limited to three years, when they come from a subsidiary, resident or not in Spanish territory, established after January 1, 2021.