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V3383-14 26 December 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · renta negativa

Losses from share reduction due to expropriation are deductible

A company asked whether a accounting loss from the write-down of an investment in a non-resident entity, resulting from an expropriation that created new assets, was deductible. The DGT replied that, as it is not a value deterioration but a change in asset nature, the restriction on deducting depreciation where exempt dividends have been received does not apply.

The question raised

Issue raised: Tax treatment of the losses recorded in the profit and loss account of entity A during the 2012 tax period.

The DGT's ruling

The disposal of a shareholding through an expropriation procedure that results in the recognition of other assets does not constitute an impairment, but rather a negative income comparable to the transfer of a patrimonial asset. Therefore, the restriction in Article 21.4 of the TRLIS, which prevents the integration of the depreciation of the shareholding up to the amount of previously received exempt dividends, does not apply. Similarly, the limitation in Article 32.5 of the TRLIS regarding impairment losses derived from the distribution of profits is not applicable.

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