Article 21 LIS — Spanish Holdco exit

What it is

Article 21 LIS is the Spanish corporate-tax rule that exempts 95% of a Holdco's capital gain on selling shares of a qualifying subsidiary. Effective tax = 25% IS × 5% taxable = 1.25%. This is the exit-phase mechanism. (Article 87 is the setup-phase mechanism — see below.)

Article 87 IN vs Article 21 OUT — memorize the pair

• Article 87 LIS — Régimen especial de aportaciones no dinerarias. The setup-phase mechanism. Lets you contribute your OpCo shares to the Holdco tax-neutrally.
• Article 21 LIS — Participation exemption. The exit-phase mechanism. 95% of the Holdco's capital gain is exempt.

Why this matters

You won't talk Article 21 with a VC. You'll talk it with your fiscalista. But knowing this cold lets you negotiate exit terms (earnouts, escrows, drag thresholds) without sweating personal-tax hits, and signals operator maturity to investors who notice cap-table sophistication.

Requirements (all three must hold)

• ≥5% participation in the subsidiary (or acquisition cost > €20M).
• Continuous holding period of at least 1 year before sale.
• Holdco is active — NOT classified as Sociedad Patrimonial (no idle cash >90 days, correct CNAE, active management).

Miss any one → Article 21 doesn't apply → Holdco pays full 25% IS on the gain.

The formula

Worked example

Stackslides exits at €100M, you hold 48% via Gints Holding S.L.

Saving via Holdco: ~€12.84M. Setup cost ~€4K, maintenance ~€2K/yr. The leverage is 2,000×.

Common mistakes

• Confusing Article 87 (setup, transfer in) with Article 21 (exit, exemption out).
• Using personal IRPF rate (28%) when computing the Holdco's tax — the Holdco pays corporate IS (25%), not personal.
• Forgetting the Patrimonial trap — the structure dies if you don't keep the Holdco actively managing participaciones.
• Conflating savings scale (~28%, capital gains on shares) with general scale (~47% in Catalonia, salary).