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V1576-24 26 June 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · scrip dividend

Scrip dividends via fully paid-up bonus shares do not meet SOCIMI profit distribution requirements

A SOCIMI company has requested clarification on whether a scrip dividend issued through the delivery of shares is valid for fulfilling the obligation to distribute profits. The Directorate General for Taxes (DGT) has ruled that, as this method does not generate income for individual shareholders, it fails to meet the distribution requirement mandated by law.

The question raised

Confirmation of whether, where applicable, a scrip dividend through the delivery of shares could be valid for the purposes of the provisions of Article 6 of the LSOCIMI, such that it could be understood that the applicant complies with the profit distribution requirement, not being an impediment when applying the SOCIMI tax regime. The question is limited to the case of individual shareholders resident in Spain.

The DGT's ruling

The delivery of fully paid-up shares to individual shareholders resident in Spain does not entail the receipt of income or revenue. As no income is generated at the shareholder level, the company does not fulfill the obligation to distribute profits provided for in Article 6 of the LSOCIMI. Dividend payments may be made in kind, but must be tax-classified as a distribution of dividends to be valid.

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