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V1283-16 29 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IRPF · retornos cooperativos

DGT rules that timing and method of distributing cooperative returns fall outside its jurisdiction

A housing cooperative has requested clarification on when and how it should distribute cash reserves among its members following the sale of a plot of land. The Directorate-General for Taxes (DGT) has stated that determining the timing and method of such distributions exceeds its scope of competence.

The question raised

1) At what time must the distribution of cash among the members take place? Whether the distribution among members must be proportional to their share of participation in the properties acquired in this development or whether another type of distribution may exist.

The DGT's ruling

The Directorate General of Taxes states that matters concerning the timing and manner of distributing cooperative returns among members exceed its scope of competence. Nevertheless, it clarifies that cooperative returns are treated as dividends and are subject to withholding tax under Personal Income Tax. Furthermore, it indicates that the distribution of surpluses is not a deductible expense for Corporate Income Tax purposes.

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