Regulations: Art. 91.1 Law Personal Income Tax
Without prejudice to the provisions of international treaties and conventions that have become part of our internal regulations, taxpayers of Personal Income Tax must include in the general tax base of the income of the tax period, as a more independent and autonomous component thereof, the positive income obtained by a non-resident entity in Spanish territory, insofar as said income belongs to any of the classes are detailed in the following section and the following circumstances occur regarding the degree of participation and the level of taxation of the non-resident entity:
Degree of participation in the non-resident entity
The taxpayer's participation in the capital, own funds, results or voting rights of the non-resident entity in Spanish territory, on the closing date of the latter's fiscal year, must be equal to or greater at 50 percent .
For these purposes, the taxpayer's participation can be directly in the non-resident entity or indirectly through one or more other non-resident entities.
This level of participation may be held by the taxpayer alone or jointly with related entities, as provided for in article 18 of the LIS , or with other taxpayers linked by kinship ties, including the spouse, in direct or collateral line, consanguineous or by affinity, up to the second degree inclusive.
Precision: In order to determine if the participation of all of them is equal to or greater than 50 percent, along with the taxpayer's participation, only that of the spouse or family members who are taxpayers for Personal Income Tax must be taken into account. ##1##, consequently excluding the participation of non-residents from said calculation.
Taxation level of the participated non-resident entity
The tax of an identical or analogous nature to the Corporate Tax paid by the non-resident entity in which it participates due to the income that must be included, must be less than 75 percent of the taxation that would correspond to those same incomes in the Spanish Corporate Tax.
Negative delimitation: non-resident entities in Spanish territory excluded from the international tax transparency regime
Regulations: Art. 91.14 Law Personal Income Tax
The imputation of income in the international tax transparency regime is not applicable when the non-resident entity in Spanish territory is resident in another Member State of the European Union or that is part of the European Economic Area Agreement, provided that the taxpayer proves that carries out economic activities.
Nor does it apply in the case of a collective investment institution regulated by Directive 2009/65/EC of the European Parliament and of the Council, of July 13, 2009, which coordinates the legal, regulatory and administrative provisions on certain collective investment organizations in transferable securities, incorporated and domiciled in a Member State of the European Union.
Therefore, for the application of this imputation regime, the entity not resident in Spanish territory cannot be resident in another Member State of the European Union or that is part of the European Economic Area Agreement, or being a resident in another Member State of the European Union or the European Economic Area, the taxpayer cannot prove that it carries out economic activities or that it is a collective investment institution regulated by the Directive 2009/65/EC.