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V1381-22 14 June 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción de capital

Excessive return of capital contributions due to capital reduction may be taxed as income from movable capital

A consultation was made regarding the tax treatment for shareholders of a company that reduced its capital through the cancellation of shares. The DGT explains how to distinguish between the return of capital contributions and undistributed profits, and how this affects the acquisition value of the remaining shares.

The question raised

Tax treatment of said operation in the Personal Income Tax of the partners.

The DGT's ruling

The return of contributions that does not derive from undistributed profits reduces the acquisition value of the shares until its cancellation; if the amount exceeds said value or if there is a positive difference with the equity, the excess is taxed as income from movable capital. Amounts corresponding to undistributed profits are taxed in full as income from movable capital. Shares held exclusively and those held under joint ownership are not considered homogeneous values with respect to each other.

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