Skip to content
Back to index
V4101-15 21 December 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · operaciones vinculadas

Sale of premises to related parties to offset debt must be conducted at market value

A company enquired whether selling premises to its related creditors to offset outstanding debt was valid. The DGT ruled that the transaction must be valued at market value and that the accounting result of the sale must be included in the tax base.

The question raised

Would said operation of sale and debt cancellation be considered economically and fiscally valid?

The DGT's ruling

The sale of real estate to amortize loans with related parties must be valued according to market value, respecting the arm's length principle. The result of the disposal shall be determined according to the recognition and measurement rules of the General Accounting Plan. Said accounting result shall be included in the taxable base of the Corporate Income Tax in the period in which the sale occurs. The debt shall be derecognized from liabilities at the time the sale proceeds are allocated to amortize the loans.

Book your free first meeting