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V5466-26 12 August 2026 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · distribución de fondos propios

Transfer of assets from a company to its shareholder is a distribution of equity, not a donation

A local council, as the sole shareholder of a company, is considering receiving a donation of its rural properties. The DGT has ruled that the transaction does not constitute a donation due to the absence of 'animus donandi', but is instead a distribution of equity (reserves, share premium, or capital).

The question raised

What would be the tax treatment in Corporate Income Tax for the donor corporation and what would be the resulting tax cost?

The DGT's ruling

Profit-making transfers from a company to its shareholder are not donations, but rather distributions of equity. As they do not constitute a pure and simple donation, the tax incentives of Law 49/2002 do not apply. The city council, as a local entity, is exempt from Corporate Income Tax pursuant to Article 9.1 of the LIS. Regarding the ITPAJD, the transaction is exempt under the documented legal acts modality.

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