The DGT clarifies how income is computed in the year a holding company is incorporated for the purposes of the Wealth Tax exemption

Binding Ruling V0145-26 of 27 January 2026

In short: in the year the holding company is set up, salaries received from the subsidiaries before the transaction do not count when checking whether management remuneration exceeds 50% of income. Only what is received from the holding company since its incorporation is taken into account, provided the move from the subsidiaries to the holding company is immediate and genuine. For the other requirements of a holding company, see our tax guide to family holding companies in Spain.

Introduction

The exemption for shareholdings in entities provided for in Article 4.Ocho.Dos of Law 19/1991, on Wealth Tax (Ley 19/1991, del Impuesto sobre el Patrimonio – the Wealth Tax Act), is one of the most important asset and tax planning tools in practice for entrepreneurs, senior managers and owners of family or investment corporate structures.

Among the requirements for its application, the rule requires the taxpayer to effectively perform management functions in the entity whose shareholding is to be exempted, receiving for that work remuneration that represents more than 50% of the total of his or her income from employment and economic activities.

This requirement, apparently simple in its wording, raises significant interpretative difficulties when the taxpayer’s corporate structure undergoes organisational changes during the tax year, as happens in the increasingly frequent processes of setting up holding companies by contributing shareholdings.

The Directorate-General for Taxes (Dirección General de Tributos, DGT) has addressed this issue in Binding Ruling V0145-26 of 27 January 2026, establishing a criterion of direct practical interest for those who have carried out, or are considering, this type of restructuring.

The situation analysed

Two individuals, not related to each other, each hold 50% of the capital of four limited liability companies (sociedades de responsabilidad limitada). Since the beginning of 2025, both have performed management functions in those entities, receiving remuneration exceeding 50% of their total income, thus meeting the requirement for the exemption.

In August 2025 they decide to set up a common holding company, to which they contribute all of their shareholdings in the four operating companies. From that moment on, they cease to receive remuneration for management functions in the subsidiaries and receive it exclusively from the holding company.

The difficulty arises at the close of the 2025 tax year: the income received before the restructuring (from the subsidiaries) exceeds, in aggregate, the income obtained from the holding company after its incorporation. Consequently, if all of the year’s income were computed globally, the remuneration received from the holding company would not on its own reach the 50% threshold, which would deprive the taxpayer of the exemption in respect of the shareholdings in the new entity.

The applicable rule and its usual interpretation

Article 4.Ocho.Dos c) of Law 19/1991 requires that the remuneration received for the performance of management functions represent more than 50% of the taxpayer’s income from employment and economic activities.

Article 5.2 of Royal Decree 1704/1999 of 5 November (Real Decreto 1704/1999, de 5 de noviembre) specifies that where the same taxpayer performs management functions in several entities, the calculation of that percentage must be made separately for each of them, without including the income obtained from management functions in the other entities in which the taxpayer directly holds shareholdings.

This rule is designed, in principle, for cases of simultaneous performance of management functions in different entities. The situation at hand, however, is not one of simultaneity, but of temporal succession within the same tax year as a direct consequence of a restructuring operation.

The DGT’s criterion: excluding income from the operating subsidiaries

The Directorate-General for Taxes resolves the issue relying on its prior doctrine, set out in rulings V0525-08, V0539-17 and V2317-17, and on the principle of tax neutrality that informs the regime applicable to business restructuring operations.

The DGT maintains that the rule in Article 5.2 of Royal Decree 1704/1999, although formulated for cases of simultaneous performance, must also be extended to cases in which management functions are performed successively between entities without any break in continuity: the taxpayer ceases to act in the subsidiaries and immediately begins to act in the holding company as a result of the same operation.

Accordingly, it concludes that, in the tax year in which the restructuring takes place, the income received from the subsidiary entities prior to the incorporation of the holding company must be excluded from the computation for the purpose of verifying compliance with the 50% requirement in respect of the shareholdings in the new entity. Only the remuneration received from the holding company since its incorporation will be taken into account.

The DGT’s conclusion is as follows, in its own terms: if, in the very year in which the restructuring operation takes place, there is remuneration from both entities, then, for the exclusive purposes of the Wealth Tax exemption, the remuneration previously received from the investee companies will be excluded from the computation of the level of remuneration for management functions in the holding company.

Assessment and practical relevance

Ruling V0145-26 has considerable practical relevance, especially where the holding company is incorporated in the second half of the tax year, when the income already accumulated in the subsidiaries is inevitably higher than what the new entity can generate in the remaining months.

A strictly literal interpretation of the rule would lead, in these cases, to denying the exemption in the year of the operation, which would produce a dissuasive tax effect contrary to the principle of neutrality that inspires the treatment of business reorganisations. The DGT rightly opts for a teleological interpretation that avoids that result.

It should be stressed, however, that the ruling expressly confines its criterion to cases of succession of management functions without any break in continuity. The operation must correspond to a genuine and effective restructuring, with verifiable cessation in the subsidiaries and assumption of management in the holding company, without gaps or situations of indefinite overlap. The mere interposition of a holding company, without the material and organisational elements that justify the effective performance of management functions, would not be covered by this criterion.

It should likewise be remembered that the Wealth Tax exemption requires compliance with all the requirements of Article 4.Ocho.Dos, not only the one relating to remuneration, and that the new holding entity must itself satisfy the conditions laid down in the rule, including the one relating to the nature of its activity.

Conclusion

Binding Ruling V0145-26 brings legal certainty to a situation which, because of its practical frequency and the difficulties presented by the year of the operation, generated reasonable uncertainty among taxpayers and their advisers. The DGT’s criterion, consistent with its prior doctrine and with the principle of tax neutrality, resolves the doubt in a favourable sense: the prior income obtained in the subsidiaries does not contaminate the analysis of the main-source-of-income requirement in the new holding company.

For those considering setting up a holding structure, or who have recently completed this operation, it is advisable to review compliance with all the requirements of the exemption well in advance of filing the Wealth Tax return, and to document properly both the effective performance of management functions and the uninterrupted nature of the transition between entities.

A warning for family structures: if, when the holding company is set up, it takes over the management of a company in which other family members still hold shares directly, those family members may lose the exemption even though the shareholder who sets up the holding company keeps it. We analyse this in holding companies and the family business: Binding Ruling V0354-26.

Related articles

• Family holding companies in Spain: a tax guide to reorganising the family business
• Family holding: when the family loses the exemption (V0354-26)
• Inspections of large fortunes: the real scope of the exemption

This article is purely informative and does not constitute individualised legal or tax advice. For any specific query, we recommend that you contact a qualified tax adviser.

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