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V1563-24 26 June 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción de capital

Tax treatment of capital reduction contribution refunds for Personal Income Tax and Wealth Tax

A sole shareholder of an unlisted company seeks clarification on the tax treatment of a capital reduction intended to refund cash contributions. The Directorate General for Taxes (DGT) clarifies that the Personal Income Tax treatment depends on whether the refund is sourced from undistributed profits or from contributions, and determines the applicability of Wealth Tax.

The question raised

Tax treatment of said operation in Personal Income Tax and in Transfer Tax and Documented Legal Acts Tax.

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