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V1642-17 23 June 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción de capital

Fiscal treatment of capital reduction with return of contributions

A shareholder asks about the tax treatment of transferring their shares to the company to carry out a capital reduction with return of contributions. The DGT determines that the operation is not a separate sale but a capital reduction subject to the regime of article 33.3.a) of the IRPF.

The question raised

Tax treatment of said operation in the taxpayer's Personal Income Tax.

The DGT's ruling

The acquisition of treasury shares for a capital reduction with a return of contributions is considered an inherent phase of said operation. The amount of the return that does not derive from undistributed profits reduces the acquisition value until its cancellation. If the non-cancelled acquisition value is negative after applying the equity limits, it is considered a negative income from movable capital. The portion of the return corresponding to undistributed profits is taxed in full as income from movable capital.

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