In our last post we discussed some of the advantages of Spanish holding companies. Now the important question is: how does a company’s investments qualify for the holding regime? There are three main requirements:
1) Participation in the holding’s subsidiaries must be of at least 5% or lower if the purchase value is € 6 million. Participations must be held during one year preceding the date in which the dividend is callable.
2) Subsidiaries must have a predominantly commercial or industrial activity. However, they can also carry out financial activities when in favor of residents in the subsidiary’s country, as long as they make use of their own resources.
3) Subsidiaries must be subject to tax similar to Spanish corporate tax.
1) Participation in the holding’s subsidiaries must be of at least 5% or lower if the purchase value is € 6 million. Participations must be held during one year preceding the date in which the dividend is callable.
2) Subsidiaries must have a predominantly commercial or industrial activity. However, they can also carry out financial activities when in favor of residents in the subsidiary’s country, as long as they make use of their own resources.
3) Subsidiaries must be subject to tax similar to Spanish corporate tax.
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