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V0751-22 6 April 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reserva de capitalización

Dividend distribution does not prevent maintaining the increase in equity for the capitalisation reserve

A company has enquired whether the distribution of dividends affects the maintenance of the increase in equity required for the capitalisation reserve. The Directorate-General for Taxes (DGT) has ruled that the maintenance requirement refers to the total amount of the increase rather than to specific line items.

The question raised

Whether it is possible to apply the capitalization reserve simultaneously with the distribution of this dividend. Whether this distribution would affect in any way the amounts reduced in previous years. Whether equity funds may be disposed of as long as the generated increase is maintained or what criterion must be followed.

The DGT's ruling

The maintenance of the increase in equity refers to the global amount and not to each individual item. The disposal of concepts that form part of the equity does not breach the requirement as long as the amount of the increase is maintained in global terms. The distribution of results from the previous financial year does not affect the maintenance of the increase in equity for the current financial year, as the latter is calculated without including said results. If the maintenance requirement is breached, the full tax amount of the profits previously applied must be paid, plus late payment interest.

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