Spanish ETVE Regime

The Spanish Corporate Income Tax Act 27/2014, regulates in its articles 107 and 108, the well-known Spanish holding company regime or ETVE (Entidad de Tenencia de Valores Extranjeros). It consists of an special tax planning tool with the aim at granting tailored tax benefits to entities holding foreign shares.

The ETVE regime can be adopted by any regular Spanish company. As a  result, it will benefit from the below tax allowances when dealing with qualifying Spanish and foreign sourced dividends and capital gains.

Tax benefits:

  1. Reduced taxation applicable to dividends and capital gains  granted  by  Double  Tax  Treaties (DTT).   Application         extensive         Spanish        DTT network.       In    particular,       with     Latin     American countries.


  1. Exemption from Spanish Corporate Income tax applicable to qualifying dividends and capital gains.


  1. Outbound dividends paid by an ETVE to its shareholder are free of Spanish withholding tax, insofar the latter is not tax resident in a blacklisted jurisdiction by Spain. Same applicable to capital gains arising from the sale of ETVE’s


In order to apply the special Spanish ETVE regime, the following requirements must be complied with:

-CONTROL: Minimum 5% shareholding, direct or indirect, (or EUR 20 million investment) in the foreign company held during at least one year (taking into account the holding group).

-SUBJECT TO TAX: The non resident company must be subject to a corporate income tax rate of at least 10%. However, said requirement is considered to be met by subsidiaries resident in a country which has concluded a DTT with Spain.

-SUBSTANCE: The Spanish Holding Company must develop its activity by means of the organization of material and personal resources to manage its shareholdings in the subsidiaries.

-NO TAX HAVEN: The subsidiary cannot be resident in a country listed as tax haven in Spain.

-CFC: subsidiaries must comply with Spanish CFC rules.


The broad Spanish tax treaty network combined with the ETVE favourable tax regime has placed Spain among the preferable jurisdictions to be used as a platform to invest in third countries.

No Comments

Post A Comment