Skip to content
Back to index
V1849-24 2 August 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · condonación de préstamo

Forgiveness of an intercompany loan within a coordination group does not generate tax income or expenses

A query was raised regarding whether the forgiveness of a loan between three companies held by the same partners generates tax effects. The DGT has determined that, as these companies belong to a coordination group, the transaction is treated accounting-wise as a distribution and contribution of funds, with no impact on the tax base.

The question raised

Whether the loan forgiveness operation between entities A and B would generate neither accounting nor tax income or expense in the Corporate Income Tax of both entities.

The DGT's ruling

As the companies are entities within a coordination group according to the PGC, the forgiveness of a credit between them is recorded as a distribution of reserves and a contribution of equity. Therefore, no accounting or tax income or expense is generated for Corporate Income Tax purposes. Regarding Personal Income Tax, the forgiveness does not produce effects for the shareholders as they are external to the loan made between the companies.

Book your free first meeting