Skip to content
Back to index
V1745-20 3 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital mobiliario

Dividends and share sales attributed to legal holder; third-party payments not deductible

A taxpayer asks how to tax dividends and the sale of shares acquired through a participation agreement with a third party. The DGT responds that income and gains are attributed to the holder of the shares, and payments to third parties are not deductible expenses.

The question raised

Taxation under Personal Income Tax regarding the distribution of dividends and the sale of shares, as well as the obligation to withhold on payments made by the taxpayer to the third party pursuant to the contract entered into. It is also inquired whether the amounts paid to the third party reduce the capital gain obtained from the sale of the shares.

The DGT's ruling

Dividends are classified as income from movable capital and the sale of shares generates a capital gain or loss, both of which are included in the savings tax base. These earnings are attributed to the taxpayer as the legal owner of the shares. Payments made to the third party are not deductible from the income from movable capital nor do they reduce the capital gain. The taxpayer is not required to withhold the payments made to the third party.

Book your free first meeting