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V1256-22 6 June 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción de capital

Capital reduction with return of contributions may be taxed as income from movable capital

A query was raised regarding the Personal Income Tax (IRPF) treatment of a capital reduction involving the return of contributions, carried out by heirs to fulfill a legacy of a third-party asset. The Directorate General for Taxes (DGT) explains how the amount received must be taxed depending on whether it originates from contributions or undistributed profits.

The question raised

Taxation in the Personal Income Tax (IRPF) of the aforementioned operation.

The DGT's ruling

The amount of the refund of contributions that does not derive from undistributed profits reduces the acquisition value of the shares. If the amount exceeds the acquisition value, the excess is taxed as income from movable capital (in the form of a share premium) without withholding. In shares not admitted to trading, it is considered income from movable capital up to the limit of the positive difference between the proportional equity and the acquisition value. The amount corresponding to undistributed profits shall be taxed in full as income from movable capital with withholding.

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