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V1972-18 2 July 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción de capital

Excess capital contribution repayments due to capital reduction are taxed as income from movable capital

A shareholder in a limited company is to receive real estate as a repayment of contributions following a capital reduction. A query has been raised regarding the taxation treatment when the difference between the value of equity and the acquisition value is negative.

The question raised

Taxation of the operation in the shareholder's Personal Income Tax (IRPF), taking into account that the difference between the acquisition value of the amortized shares and the equity value of the shares corresponding to the last fiscal year closed prior to the date of the capital reduction is negative.

The DGT's ruling

The amount of the refund that does not derive from undistributed profits shall reduce the acquisition value of the shares until its cancellation. If the difference between the equity and the acquisition value is negative, the market value of the assets received shall fully reduce the acquisition value of the amortized shares. The resulting excess shall be taxed as income from movable capital not subject to withholding or payment on account. If any acquisition value remains uncancelled, it shall be incorporated into the acquisition value of the non-amortized shares.

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