Delisting from stock exchanges does not generate a capital loss for Personal Income Tax (IRPF)

The Dirección General de Tributos (DGT) has issued a relevant ruling regarding the tax treatment of shares that are delisted. There is recurring confusion between the loss of liquidity or exclusion from a stock market and the existence of a real capital loss for the purposes of Personal Income Tax (IRPF).

What the DGT has ruled

The query concerned whether the delisting of certain securities could be reflected as a capital loss in the IRPF tax return. The advisory body has determined that delisting or the removal of registration in the registry of account annotations does not imply the transfer of the securities nor the loss of ownership of them.

For a capital loss derived from the dissolution of companies to occur, it is an indispensable requirement that the process of dissolution and liquidation of the entity has been previously completed. The change in assets is only considered to have occurred in the tax period in which said liquidation is effectively formalized.

What this means for you

If you are a shareholder of a company that is delisted from the stock exchange, this fact alone does not allow you to recognize a loss in your income tax return. Although the market value of your shares may be affected or the possibility of selling them may become more complex, you legally remain the owner of the securities.

This ruling directly affects the individual shareholder who intends to declare a capital loss based solely on the status of their shares. As long as the company maintains its legal personality and has not proceeded to its liquidation, the taxable event of a capital loss for this concept does not exist.

What should be done

It is necessary to distinguish between the market situation of a security and the legal situation of the company that owns said security. In situations of delisting, the legal status of the issuing entity must be verified. If a capital loss is intended to be applied, it is fundamental to check whether the requirements for dissolution and liquidation have been met in accordance with current regulations.

Each situation requires an analysis of the corporate documentation to determine the exact moment when the transfer or the loss of rights over the capital occurs.