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V0041-16 8 January 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción de capital

Sale of shares to the company itself is taxed as a capital reduction with return of contributions

The taxpayer asks how to calculate the transfer value of shares sold to their own company for the purpose of redemption. The DGT rules that, as this involves a limited company acquiring its own shares, the transaction must be carried out via a capital reduction, applying the regime for the return of contributions rather than the regime for capital gains.

The question raised

Calculation of the theoretical value of social shares for the purposes of applying Article 37.1.b) of the Tax Law, which regulates the calculation of capital gains or losses derived from the transfer of unlisted securities, taking into account the existence of cross-shareholdings between companies.

The DGT's ruling

The acquisition of treasury shares by a limited liability company must be carried out pursuant to a capital reduction agreement. Therefore, the transaction is not governed by the rules for capital gains or losses on unlisted securities (Art. 37.1.b), but by the regime for capital reduction with return of contributions (Art. 33.3.a). The amount received or its market value shall reduce the acquisition value of the shares until their cancellation, and any excess shall be included as income from movable capital.

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