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V1130-16 21 March 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · valor de adquisición

Issuance of additional shares in an IPO does not constitute income or require withholding tax

A company inquired whether receiving one additional share for every 40 acquired in an IPO (subject to a one-year holding period) constitutes income for the investor. The DGT ruled that no income is obtained and that the acquisition value of all shares shall be the actual amount paid plus expenses and taxes.

The question raised

Whether the delivery of the additional share constitutes a lower acquisition value of the shares acquired in the IPO and, consequently, whether the consultant has no obligation to perform a withholding tax payment.

The DGT's ruling

The delivery of additional shares does not result in the receipt of income for the Personal Income Tax taxpayer, and therefore there is no obligation to perform a withholding tax payment. For future transfers, the acquisition value of the shares (including the additional ones) shall be the actual amount paid for the acquisition plus the inherent expenses and taxes thereof.

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