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This exemption does not apply to capital gains derived directly or indirectly from:

The CIT Law also introduced a system for calculating exempt dividends and gains derived from multi-tiered structures where some of the entities within the chain of ownership are not compliant with the participation exemption requirements. This requirement is deemed to be met when the foreign subsidiaries are resident in a country that has signed a tax treaty with Spain that includes an information exchange clause. The subsidiary is subject to a minimum level of (nominal) taxation of 10 percent under a foreign corporate tax system similar to the Spanish CIT (non-resident subsidiaries only).A 1-year uninterrupted holding/maintenance period is met.The Spanish entity must hold, directly or indirectly, at least 5 percent of the share capital or equity of the Spanish or foreign companies or, failing this, an acquisition value of at least 20 million euros (EUR).The CIT Law in force until 1 January 2021 stated a PEX (of 100 percent) regime for dividends and capital gain obtained by a Spanish holding entity derived from either Spanish or non-Spanish subsidiaries when certain requirements are met. The most relevant measures for CIT purposes established in the GSB Law (with effect as from the tax periods commencing on 1 January 2021 and thereafter) that could affect M&A transactions relate to the Spanish participation exemption (PEX) regime. Tax measures in General State Budget Law (“GSB Law”) – Main amendments to the Spanish Corporate Income Tax (CIT) Law The most relevant, in terms of their potential impact on M&A transactions, are summarized hereto. The Spanish government has approved several regulations that contain significant tax measures that could result, generally, in an increase in taxation and compliance complexity.