Income not subject to imputation

Regulations: Art. 91.3.g), 4, 5 and 9 Law Personal Income Tax

Without prejudice to what was mentioned above, the following income is not susceptible to imputation:

• Positive income corresponding to income derived from credit, financial, insurance or service provision activities, when more than 50 percent of the income corresponding to them has been made with persons or entities not linked in the terms of article 18 of the LIS

• The income provided for in letters b) and e) of the previous section " Income susceptible to imputation ", in the case of values derived from participation in the capital or own funds of entities that grant at least 5% of the capital of an entity and are held for a minimum period of one year, for the purpose of directing and managing the participation, provided that the investee entity meets the following requirements:

  • That it has the corresponding organization of material and personal means, and
  • That does not have as its main activity the management of movable or real estate assets in the terms provided for in article 4.Eight.Two a) of Law 19/1991, of June 6, on Wealth Tax.

  In the case of entities that are part of the same group of companies according to the criteria established in article 42 of the Commercial Code, regardless of residence and the obligation to prepare consolidated annual accounts, the requirements relating to the percentage of participation, as well as and the existence of a direction and management of participation will be determined taking into account all those who are part of it.

• The positive income referred to in the previous section " Income susceptible to imputation " when the sum of their amounts is less than 15 percent of the total income obtained by the non-resident entity, except the income referred to in letter g) of said section, which will be allocated in its entirety.
• The amount of the tax or taxes of an identical or similar nature to the Corporate Tax actually paid by the non-resident company for the part of income to be included.

• Dividends or participation in profits, including interim dividends, in the part that corresponds to the positive income that has been imputed.

  In the case of distribution of reserves, the designation contained in the social agreement will be followed, with the latest amounts paid to said reserves being understood to be applied.

Note: The same positive income may only be subject to imputation once, regardless of the form and entity in which it manifests itself.