Doctrine by topic · DGT Observatory

Free Allocation Rights: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

← DGT Observatory

How the DGT's position has evolved

Settled doctrine High confidence 10 rulings · 2016–2024

Current position

Income derived from scrip dividend programs has the nature of a dividend, whether the shareholder receives bonus shares, sells the rights on the market, or receives cash. The delivery of bonus shares does not involve obtaining income and maintains the seniority of the original shares, distributing the total cost among all securities. If the shareholder sells the rights to the issuing company itself, the compensation received is a dividend subject to withholding tax.

The DGT's position remains constant regarding the classification of income as dividends and the treatment of bonus shares. It has specified the distinction between the sale of rights on the market, which does not involve withholding, and the sale of rights to the company itself, which is subject to withholding.

Turning points

  1. V2469-20

    Specifies that if the distribution is charged to the share premium, the amount is assimilated to a capital reduction, reducing the tax value of the holding.

  2. V1245-24

    Clarifies that the sale of rights to the issuing company itself has the nature of a dividend and is subject to withholding, differentiating it from the sale on the market.

Analysis based on 10 of 10 rulings with a stated position. Updated 28 September 2026.

Rulings on this topic

10
V2468-20 20 Jul 2020

Script dividends are classified as dividends regardless of the option chosen

SG de Impuestos sobre las Personas Jurídicas
scrip dividendderechos de asignación gratuitaacciones liberadasprima de emisiónretención LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 7LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 10.3
Affects CompanyExpat · Non-residentIndividual

Apply this to your case

Corporate tax advisoryTalk to the team applying this doctrine daily.
Talk to the tax teamWe check whether this criterion affects you and what it means in your situation.
Email
Contact