28 December 2016 Spanish Supreme Court rules Brazilian Interest on Net Equity payments constitutes distribution of profits for domestic participation exemption purposes The Spanish Supreme Court (Tribunal Supremo) issued a new decision on December 15, confirming that, for domestic law purposes, the legal nature of income received by Spanish entities from Brazilian subsidiaries in the form of Brazilian Interest on Net Equity payments (juros sobre o capital proprio or JsCP) is equivalent to a distribution of profits and thus can utilize the Spanish domestic participation exemption for dividends as applicable for tax years starting prior to January 1, 2015. A Tax Alert prepared by EY's Global Tax Desk Network, and attached below, provides additional details. Document ID: 2016-2232 |
