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V0133-17 23 January 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · consolidación fiscal

Credit forgiveness between group companies may not create taxable income if it amounts to share capital contributions

A dominant company seeks advice on the tax impact of forgiving or capitalising debts between its subsidiaries during a restructuring. The DGT states that credit forgiveness between 100% owned subsidiaries is considered a contribution to shareholders' equity and does not generate taxable income.

The question raised

Described in the body of the response.

The DGT's ruling

The forgiveness of a credit from a parent company to a subsidiary (100% owned) is considered a contribution to equity without generating accounting or tax income. In the capitalization of credits, the income resulting from the difference between the value of the capital increase and the tax value of the credit is included in the tax base. Financial income from the write-off of third-party creditors must reduce net financial expenses for the purpose of the 30% limit of operating profit. Debt renegotiation that generates income at fair value is fiscally equated to a write-off.

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