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V0343-16 28 January 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · renta negativa

Deferral of intra-group capital losses does not apply if acquirers are individual shareholders

A requesting entity asks whether it can tax-attribute a capital loss arising from the transfer of subsidiary shares to its shareholders within the same financial year, by applying Article 11.10 of the Corporate Income Tax Act (LIS). The Directorate General for Taxes (DGT) rules that this temporal attribution criterion is not applicable because the acquirers are not entities within the same group, but rather individual shareholders.

The question raised

Whether the consulting entity may fiscally impute said negative income in the tax period in which it transfers the shares to its individual shareholders, in application of Article 11.10 of the Corporate Income Tax Law.

The DGT's ruling

Article 11.10 of the LIS allows for the imputation of negative income from the transfer of shares in the period in which they are transferred to third parties outside the group, provided that the income arises from intra-group transactions. In this case, as the acquirers are individual shareholders and not entities within the same group, the temporal imputation criterion provided for in said article does not apply. The entity must include the income in its tax base for the period of transfer according to the direct estimation method.

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