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V0272-16 25 January 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del capital mobiliario

Income tax refunds may be requested for interest on preferred shares declared null and void

A taxpayer inquired about the tax treatment regarding the nullity of preferred shares, the refund of interest, and statutory interest. The Directorate General for Taxes (DGT) ruled that interest already paid can be recovered through a tax return amendment, and that statutory interest resulting from the nullity is taxed as capital gains.

The question raised

1. Tax implications in Personal Income Tax regarding the declaration of nullity, with respect to the refund of the gross interest of the securities and the amount received from the sale of the shares, as well as the receipt of legal interest recognized by judgment.

The DGT's ruling

Interest from preferred shares declared null and void may be subject to rectification of the self-assessment to obtain a refund of undue payments, even if the right has prescribed. Legal interest due to nullity and interest for late payment of tax assessments are taxed as capital gains. The former are imputed to the period in which the judgment becomes final and the latter to the period when they are quantified. Both are included in the savings tax base. The payment of legal costs constitutes a capital gain due to its restorative nature.

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