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V2176-24 10 October 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · préstamo participativo

Interest on participating loans between group entities is not a tax-deductible expense

A real estate company has inquired whether interest from a participating loan provided by its majority shareholder—which has been recognised in the accounts as part of the value of its inventory—is tax-deductible. The Directorate General for Taxes (DGT) has ruled that, as the entities belong to the same group, these payments are considered dividends and do not constitute a tax-deductible expense.

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