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V3931-15 9 December 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · gastos financieros

Interest expenses on shareholder loans are deductible if not classified as participating loans

A company inquired whether the interest expenses on a loan granted by its shareholders were deductible for Corporate Tax purposes. The DGT ruled that they are deductible as the loan does not have the character of a participating loan, although they remain subject to statutory limits.

The question raised

Whether the financial expenses derived from the loan made by the shareholders are considered deductible for Corporate Income Tax purposes.

The DGT's ruling

The financial expenses of a subordinated loan granted by shareholders are deductible for Corporate Income Tax purposes, as the loan does not have a participatory character. However, such deductibility is subject to the financial expense limitation established in Article 16 of the LIS. Furthermore, if the debt finances the acquisition of holdings in a tax group, the limitation rules of Article 67.b) of the LIS shall apply.

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