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Spain: Related Information

Tax-Efficient Business Forms

Spanish holding companies, known as Entidades de Tenencia de Valores Extranjeros (ETVEs), are exempt from corporate income tax on qualified foreign-source dividends and capital gains, as well as on income distributed to shareholders or on the profit derived from shareholders selling their shares. Dividends paid by an ETVE to its non-resident parent company are also exempt from withholding taxes so long as the parent company is itself subject to corporate income tax in its country of origin and is not in a jurisdiction listed by the tax authorities as a “tax haven”.

There are special tax rates and allowances for establishments in the Canary Islands, one of them being an allowance to compensate for the long distance from the mainland and general insularity.

Special allowances and tax rates also apply to the territories of Ceuta and Melilla. These include a 50% reduction in corporate and personal income tax on income derived in Ceuta or Melilla.



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