On 21 February 2014, the General Director of the Internal Revenue Service published Circular No. NAC-DGECCGC14-00003 in order to communicate the tax authority’s application of the substance over form principle as a criterion for the application of the tax benefit established under numeral 15.1 of article 9 of the Internal Tax Law (Ley Orgánica de Régimen Tributario Interno – LORTI).
The established tax benefit provides income tax exemptions, to natural persons or companies, in respect of income which is derived from fixed-term deposits or deposits of at least one year, issued by national financial institutions; and to natural persons or companies in respect of income derived from investments in fixed-income securities, which have been negotiated through the Stock Market and have a duration of at least 1 year.
