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V1218-16 28 March 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · reembolso de participaciones

Transfer value must be reported to apply the reduction for acquisitions prior to 1994

A taxpayer has enquired about how to determine the withholding tax on the redemption of investment fund units acquired in 1988 and 1989. The DGT clarifies that, in order to apply the transitional regime under the ninth transitional provision of the Personal Income Tax Act (LIRPF), the transfer value must be communicated to the entity prior to redemption.

The question raised

Application of the ninth transitional provision of the Personal Income Tax Law to determine the withholding tax to be applied upon the reimbursement of investment fund shares.

The DGT's ruling

In order for the entity obligated to withhold to apply the provisions of the ninth transitional provision of the Personal Income Tax Law (LIRPF) regarding the reimbursement of shares acquired before December 31, 1994, the taxpayer must communicate the transfer value to said entity in writing. This communication must be made before the obligation to withhold arises, that is, before the reimbursement is formalized. The application limit of this transitional regime is 400,000 euros for transfers made since January 1, 2015.

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