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V2916-21 ·18 November 2021 ·consulta-vinculante Medium impact
Tax

Forgiveness of a loan between companies does not generate income for partners for Personal Income Tax purposes (except in certain cases)

Consultants inquired whether the forgiveness of a loan between two companies with common partners, and the transfer of a foreign company's registered office to Spain, have implications for their Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that loan forgiveness does not affect the partners' IRPF and that the transfer of a registered office does not result in capital gains or losses, provided the legal personality is maintained.

In 6 key points

How it affects those involved

The ruling clarifies that inter-company debt forgiveness does not trigger tax liabilities for individual shareholders under Personal Income Tax, and confirms that relocating a company's headquarters to Spain is tax-neutral regarding capital gains if the legal entity remains intact.

Lifecycle

2021-11-18PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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