DGT excludes active management fees from Personal Income Tax deductions

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the tax treatment of costs associated with investment portfolio management. The inquiry focuses on determining whether fees paid to banking entities for the active management and revaluation of negotiable securities can be deducted from Personal Income Tax (IRPF).

What the DGT has ruled

The advisory body has ruled that active management fees intended to revalue a portfolio do not qualify as administration and custody expenses for negotiable securities. According to the ruling, these amounts do not constitute mere static administration or commercial custody.

Furthermore, the DGT establishes that these costs cannot be deducted as expenses inherent to the acquisition or transfer of securities. The technical reason is that these are periodic payments linked to the valuation of the portfolio, which prevents establishing a clear and precise link with specific redemption or transfer operations of the assets. Consequently, these amounts are not deductible from income from movable capital, nor can they be used to determine capital gains or losses.

What this means for you

This ruling directly affects individuals who manage investment portfolios through banking entities and pay tax on income from movable capital. If you make periodic payments to your financial institution so that it actively manages your assets to increase their value, you should be aware that this expense will not reduce your taxable base for IRPF.

In practical terms, the tax burden on the returns obtained will be higher, as you will not be able to subtract these fees from the profit obtained from the sale of securities or from the interest generated.

What you should do

Since the applicable regulations are based on the IRPF Law and the Securities Markets Law, it is necessary to analyze the exact nature of the costs being charged in bank statements. It is recommended to evaluate the cost structure of your investment products and check whether the invoiced concepts correspond to static administration or active management, as the tax treatment varies depending on the nature of the service received. Each financial situation should be analyzed individually to ensure compliance with current regulations.