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V0750-22 5 April 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reserva de capitalización

Distribution of tax transparency reserves may lead to breach of capitalisation reserve requirements

A query was raised regarding whether tax transparency reserves are taken into account when maintaining the increase in equity required by the capitalisation reserve. The Directorate General for Taxes (DGT) indicates that the distribution of such reserves in 2020 reduces equity for the purposes of verifying compliance with this requirement.

The question raised

Whether the tax transparency reserve item forms part of the equity computable to determine compliance with the requirement to maintain the increase in equity for the purposes of applying the capitalization reserve; or whether it could be considered that said reserves have a legal character because they were protected by specific regulations.

The DGT's ruling

To comply with the requirement to maintain the increase in equity for 5 years, the difference between the equity at the close and at the beginning of the period must be equal to or greater than the increase that originated the reduction. The distribution of tax transparency reserves constitutes a charge that decreases equity at the close of the fiscal year. If this distribution results in the failure to maintain the necessary increase, the requirements for the capitalization reserve will be breached.

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