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V1963-22 15 September 2022 · SG de Tributos Locales Criterion in force
OTRO · iivtnu

Capital reduction through transfer of real estate is subject to IIVTNU, with the company as the taxable person

A public commercial company has enquired whether the transfer of urban real estate as part of a capital reduction is subject to municipal capital gains tax. The DGT has ruled that this constitutes an onerous transfer subject to the tax, with the company acting as the taxable person.

The question raised

Whether the transfer of real estate assets in a share capital reduction operation is subject or not to the Tax on the Increase in Value of Urban Land.

The DGT's ruling

Capital reduction through the delivery of real estate assets constitutes an onerous transfer, as the company delivers the asset and the shareholder delivers their shares. Therefore, the taxpayer is the consulting company as the transferor, pursuant to Article 106.1.b) of the TRLRHL. To determine the increase in value, the acquisition value (the proportion of the cadastral land value applied to the purchase price) must be compared with the transfer value (the proportion of the cadastral land value applied to the market value of the property).

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