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V2050-22 23 September 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Capital gains from the sale of a business activity may be recognised as payments are received

A taxpayer has requested guidance on how to tax the sale of a company where the final price depends on future profits and is paid in instalments. The Directorate General of Taxes (DGT) indicates that the taxpayer may either estimate the price or recognise the income as payments are collected.

The question raised

How the payments received should be taxed under Personal Income Tax (IRPF).

The DGT's ruling

The transfer of assets used in a business activity generates a capital gain or loss based on the difference between the acquisition and transfer values. If the price is not predetermined, the taxpayer must make an estimate to declare in the period of the transfer, subsequently regularizing if differences arise. However, as it is a deferred price with successive payments occurring over more than one year, the method of temporal imputation according to Article 14.2 d) of the LIRPF may be applied, imputing the income as the payments are received.

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