Scope

Positive delimitation

Regulations: Art. 91.1 Law Income Tax

Without prejudice to the provisions of international treaties and agreements that have become part of our internal legal system, taxpayers of IRPF must include in the general tax base of income for 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 one of the classes 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:

1. Degree of participation in the non-resident entity

   The taxpayer's participation in the capital, equity, results or voting rights of the entity not resident in Spanish territory, on the closing date of the latter's financial year, must be equal to or greater than 50 percent .

   For these purposes, the taxpayer's participation may be directly in the non-resident entity or indirectly through another or other non-resident entities.

   This degree of participation may be held by the taxpayer himself or jointly with related entities, as provided for in article 18 of the LIS , or with other taxpayers linked by family ties, including the spouse, in a direct or collateral line, consanguineous or by affinity, up to the second degree inclusive.

   Precision: For the purposes of determining whether the participation of all of them is equal to or greater than 50 percent, together with the taxpayer's participation, only that of the spouse or family members who are taxpayers for IRPF must be taken into account, consequently excluding the participation of non-residents for said calculation.

2. Level of taxation of the participating non-resident entity

   The tax of an identical or analogous nature to the Corporate Tax paid by the non-resident entity in which the company participates due to the income that must be included, must be less than 75% of the taxation that would correspond to the same income in the Spanish Corporate Tax.

Negative delimitation: Entities not resident in Spanish territory excluded from the international tax transparency regime

Regulations: Art. 91.14 Law Income Tax

The allocation of income in the international tax transparency regime is not applicable when the entity not resident in Spanish territory is resident in another Member State of the European Union or is part of the European Economic Area Agreement, provided that the taxpayer proves that it carries out economic activities.

It is also not applicable when it is a collective investment institution regulated by Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 coordinating the laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities, established 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 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 is a collective investment institution regulated by Directive 2009/65/EC.