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V0714-14 14 March 2014 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · obligaciones subordinadas

Conversion of subordinated debt generates returns on movable capital taxable under the savings tax base

A query was made regarding the tax treatment of converting subordinated bank bonds into shares following a FROB resolution. The DGT has determined that the transaction generates a return on movable capital based on the difference between the repurchase price and the acquisition price.

The question raised

Tax treatment of these operations under Personal Income Tax.

The DGT's ruling

The conversion generates a return on movable capital determined by the difference between the repurchase price set by the FROB and the acquisition value. This return constitutes savings income and is attributed to the period in which the repurchase becomes due. If the return is positive, it shall not be subject to withholding if the requirements of the Personal Income Tax Regulations for assets with explicit returns are met. The shares received shall have as their acquisition value the subscription price set in the resolution.

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