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V3594-20 17 December 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción de capital

Capital reduction to offset company losses does not generate capital gains or losses for the shareholder

A sole shareholder inquires whether a company's capital reduction to offset losses has tax implications for their Personal Income Tax (IRPF). The Directorate General of Taxes (DGT) rules that no capital gain or loss arises if the operation is not intended to return capital contributions.

The question raised

Taxation of the partner regarding the capital reduction to offset losses and the deductibility for the partner of the offset losses.

The DGT's ruling

A capital reduction that is not intended for the return of contributions does not generate a capital gain or loss pursuant to Article 33.3.a) of the Personal Income Tax Law (LIRPF). The acquisition value of the amortized shares shall be distributed proportionally among the remaining homogeneous shares, which shall retain their original acquisition date.

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