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An individual has enquired whether incorporating a company will result in wealth variations for Personal Income Tax purposes. The Directorate-General for Taxes (DGT) has ruled that this only occurs if non-monetary assets or rights are contributed, which triggers a capital gain or loss.
This ruling clarifies that the mere act of incorporating a company does not trigger tax consequences unless non-cash assets are involved, which must be valued at market price to determine the taxable gain or loss.
The tax team reviews your specific situation.
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