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V3375-20 17 November 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen de canje de valores

Tax treatment of capital reductions in IRPF depends on whether from profits or contributions

A taxpayer asks whether a capital reduction in their entities affects the special share exchange regime applied in a prior contribution. The DGT cannot assess commercial matters or Corporate Tax due to lack of timeliness, but explains the IRPF treatment.

The question raised

In the event that entities P and/or F reduce their share capital by delivering the corresponding amount of cash to entity A, would this operation affect the application of the aforementioned Tax Regime and would Pf1 have to carry out any regularization.

The DGT's ruling

Regarding Corporate Income Tax, the DGT cannot assess the application of the special regime for the exchange of securities because the deadlines for filing the tax returns for the transaction have already expired. Furthermore, the inquiry does not provide sufficient information to determine how the capital reduction would affect the regime applied in 2016. Regarding Personal Income Tax, it is noted that in capital reductions due to the return of contributions, the amount that does not derive from undistributed profits reduces the acquisition value, with the excess over said value or over the positive difference in equity being taxed as income from movable capital.

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