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V0245-16 22 January 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · transmisión de acciones propias

Sale of treasury shares does not affect Corporate Income Tax taxable base

An entity inquired whether the proceeds from selling its own shares should be treated as income for Corporate Income Tax purposes. The DGT ruled that, as this constitutes a variation in equity that does not pass through the profit and loss account, it has no tax implications.

The question raised

Whether the positive or negative result from the transfer of the entity's own shares, which does not determine any result to be computed in the profit and loss account but rather a variation in equity, should or should not be considered income in the determination of the Corporate Income Tax taxable base, whether in installment payments or in the final tax settlement.

The DGT's ruling

As there is no specific regulation in the LIS, the accounting criterion of article 10.3 is applied. According to the General Accounting Plan, transactions with equity instruments are recorded in equity and do not generate results in the profit and loss account. Therefore, the transfer of treasury shares has no effect on the Corporate Income Tax taxable base as it is neither income nor an expense.

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