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V3250-23 19 December 2023 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

A permanent establishment may apply capitalisation reserve reduction at its own site

The DGT confirms that a permanent establishment can benefit from the reduction in taxable base due to capitalisation reserve, provided it has an appropriate capital structure, as the non-resident income tax regulation is applied under the general corporate tax regime.

The question raised

Question raised

The DGT's ruling

The taxable base of the permanent establishment is determined in accordance with the provisions of the general regime of the Corporate Income Tax. Consequently, the calculation of the increase in equity for the capitalization reserve shall be carried out at the seat of the permanent establishment, provided that it possesses a capital structure appropriate to its organization and functions, regardless of the evolution of the equity of the head office.

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