Spain: IS exemption on the sale of solar park development entities (RtB)


published on 6 October 2023 | reading time approx. 2 minutes

The Tax Authority reopens the possibility of applying the exemption provided in art. 21.3 of the Corporate Income Tax Law (LIS) with respect to the gain obtained on the sale of shares in an entity dedicated to the development of photovoltaic park in the ready-to-build (RtB) phase. 

The Tax Authority, in its binding ruling V2200-23 of 26 July 2023, changes its criteria with respect to the binding ruling V2265-21 of 12 August 2021, by considering that, although it has to be analysed case by case, in principle, an entity dedicated to the promotion of a photovoltaic park is not a patrimonial entity for the purposes of art. 5.2. LIS. This criterion is in line with its binding ruling V2931-16 of 23 June 2016. 
In this binding ruling, the Tax Authority analyses the case of a holding entity that is the owner of several SPVs that are engaged in the processing and promotion of photovoltaic projects in Spain. This promotion of photovoltaic parks includes the performance of all the activities necessary to obtain the RtB status (i.e., drafting of technical and engineering projects, obtaining the municipal license for the works, etc.).  
The SPV, during the promotion stage, does not have its own personal resources for the exercise of the economic activity, obtaining all the necessary services from the holding company and external suppliers. 
In this case, the holding company wonders whether the positive income obtained on the transfer of the SPVs' shares when they reach RtB status can benefit from the exemption provided in art. 21.3 LIS. 
The Tax Authority states that the SPVs are carrying out an activity of promoting photovoltaic solar parks, and therefore these entities would not be considered as patrimonial entities, as their assets would be used to carry out an economic activity. 
Therefore, if the requirements of art. 21 LIS are met (i.e., 5% shareholding and 1 year of uninterrupted holding of the shares), the holding company may apply the 95% exemption of art. 21.3 LIS, with respect to the positive income derived from the transfer of its shares in the SPVs. 
In this regard, it is important to note that the activity of the SPVs in question is the promotion of solar parks, so it will be necessary to consider each case individually to confirm whether the exemption of art. 21.3 LIS is applicable. 


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