Unlisted shares may be transferred at their real amount if market value is proven

Determining the transfer value of shares in unlisted companies is a critical point in the settlement of Personal Income Tax (IRPF). An error in this calculation can lead to the incorrect integration of capital gains or losses into the savings tax base.

What the DGT has resolved

The Directorate General of Taxes (DGT) has clarified the procedure for establishing said value in accordance with current regulations. The criteria establish that, for securities not admitted to trading, the transfer value shall be the real amount paid, provided that it can be proven that said amount corresponds to the market value between independent parties.

In the event that it cannot be proven that the agreed price reflects the market value, the Administration will apply an alternative method to determine the value. In this scenario, the transfer value will be the higher of the following two amounts:

• The net equity of the last closed fiscal year.
• The result of capitalizing the average of the results of the three previous fiscal years at 20%.

The difference between this determined value and the acquisition value will constitute the capital gain or loss that must be integrated into the savings tax base.

What it means for you

If you are an individual selling shares in a company that is not listed on the stock exchange, it is not enough to declare the sale price agreed upon in the deed. If the Tax Agency considers that the price is not at market value and you do not have means of proof, a potentially higher transfer value will be imposed on you, which will increase the savings tax base and, therefore, the tax to be paid.

What you should do

In an operation of this type, it is fundamental to have documentation that supports that the transaction price is the market price. The ability to demonstrate that the operation is carried out between independent parties is the key to avoiding the application of the default valuation methods provided by the regulations. It is recommended to assess each particular situation to ensure that the declared transfer value is the one that legally corresponds.