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V1857-23 27 June 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · derivación de responsabilidad

The forgiveness of a debt between companies with the same shareholders does not generate tax income if treated accounting-wise as a contribution

A company (X) pays the debts of another (Y) due to derivative liability and asks whether the subsequent forgiveness of that credit has tax effects. The DGT responds that, if recorded accounting-wise as a contribution by shareholders to equity, there will be no tax income or expenses.

The question raised

Question raised - Tax treatment of the debt in the event of non-repayment or partial repayment of the amounts paid, as well as of the accrued interest.

The DGT's ruling

The payment of a debt by a third-party company generates a credit right, not an expense. If the debt is forgiven between companies held by the same shareholders in identical proportions, it is recorded accounting-wise as a contribution by shareholders to equity. As it does not affect the accounting result, no tax effect will be generated in the taxable base of the Corporate Income Tax pursuant to Articles 10.3 and 11 of the LIS.

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