Skip to content
Back to index
V3264-20 30 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 may be taxed as investment income or be exempt depending on the source of funds

A shareholder has requested clarification on the taxation of the company's acquisition of her shares for redemption through a capital reduction. The DGT explains that the tax treatment depends on whether the return stems from original contributions or from undistributed profits.

The question raised

Taxation of the transaction for the taxpayer.

The DGT's ruling

If the capital reduction is intended for the return of contributions, the amount that does not derive from undistributed profits reduces the acquisition value until its cancellation. The excess or the portion corresponding to undistributed profits shall be taxed as income from movable capital. However, if the profits originate from fiscal years in which the company applied the holding company regime, such distribution shall not be included in personal income tax (IRPF) income.

Book your free first meeting