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V0255-22 14 February 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancias y pérdidas patrimoniales

Dissolution and liquidation of a company required to recognise capital losses on shareholdings

A taxpayer has enquired whether they can recognise a capital loss arising from holding shares in a company undergoing insolvency proceedings. The Directorate General for Taxes (DGT) has ruled that, to apply Article 37.1.e) of the Personal Income Tax Act, the company must first undergo dissolution and liquidation.

The question raised

Possibility of accounting for a capital loss in Personal Income Tax.

The DGT's ruling

For holdings in insolvent entities to be considered capital losses pursuant to Article 37.1.e) of the Personal Income Tax Law, the dissolution and liquidation of the company must first take place. The tax period in which the loss shall be accounted for shall be that in which said liquidation occurs.

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