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V3221-20 28 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción de capital

Return of contributions via capital reduction is taxed as income from movable capital based on its origin

A query was raised regarding the taxation of a capital reduction involving a return of contributions that amortises part of a shareholder's holdings. The DGT explains that the tax treatment depends on whether the return originates from undistributed profits or from shareholder contributions.

The question raised

The taxation of the transaction for the taxpayer is consulted, and what should be understood for such purposes by undistributed profits.

The DGT's ruling

The portion of the refund that does not derive from undistributed profits reduces the acquisition value of the shares until its cancellation. If the amount exceeds said value, the excess is taxed as income from movable capital. Conversely, the portion corresponding to undistributed profits shall be taxed entirely as income from movable capital and shall be subject to withholding. In this case, voluntary reserves derived from profits that are allocated to the transaction are considered undistributed profits.

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