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V2912-20 25 September 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IRPF · ganancia patrimonial

Exit of a partner via temporary pension in exchange for shares is taxed as a capital gain

A partner wishes to retire by receiving a temporary pension of 18,000 euros per month for 5 years in exchange for their shares, which the company will acquire for redemption. The DGT analyses the tax treatment regarding Personal Income Tax, Transfer Tax/Stamp Duty, and Corporate Tax.

The question raised

Inquiry is made regarding the taxation under different taxes of the aleatory contract consisting of the establishment by company A of the previously described temporary pension in favor of the outgoing partner in exchange for the transfer of his shares, which would be acquired by the company itself for its amortization in application of article 140.1.b) or 140.1.d) of the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of July 2. Specifically:

The DGT's ruling

In Personal Income Tax (IRPF), capital gains or losses are determined by the difference between the current actuarial financial value of the income (or market value) and the acquisition value. This gain is imputed at the time of the transfer and the establishment of the income. The monthly pension is taxed as income from movable capital, applying a 12% yield for income for up to 5 years. In Transfer Tax and Stamp Duty (ITP/AJD), the transfer of shares is exempt if there is no intent to evade taxes on real estate. In Corporate Income Tax, the company reduces its equity (capital and reserves) and must value the pension at its market value as it is a transaction between related parties.

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