7.2.2. Gross income from movable capital

The total profits or compensation, whatever their name or nature, whether monetary or in kind, that come, directly or indirectly, from assets, goods or rights, of a movable nature, whose ownership corresponds to the taxpayer and are not related to economic activities carried out by the same, will be considered as gross capital returns.

The Tax Law provides that in no case will assets representing participation in the equity of an entity and the transfer of capital to third parties be considered taxable items (art. 29.1.c) Law).

However, income derived from the transfer of ownership of assets, even when there is a retention of title agreement, will be taxed as capital gains or losses, unless they are expressly classified as capital gains, as is the case of the transfer of assets representing the raising and use of third-party capital (bonds, bills, promissory notes, etc.).

The consideration obtained by the taxpayer for the deferral or fractionation of the price of operations carried out in the development of his usual economic activity will not be considered as income from movable capital, without prejudice to its taxation under the corresponding concept (art. 25.5 Law).

Benefits in kind

If the capital gains are received in kind, the market value of the goods or services received must be computed as full income. The advance payment will be added to this value, unless its amount has been passed on to the recipient of the income (art. 43.2 of the Law).

Estimated income (art.40 Law)

The provision of goods or rights that may generate capital gains shall be presumed to be remunerated, unless proven otherwise (art. 6.5 Law)

The valuation of the estimated income will be carried out at the normal market value. Normal market value shall be understood as the consideration that independent subjects would agree upon, unless proven otherwise.

In the case of loans and operations for raising or using external capital in general, the normal market value shall be understood as the legal interest rate of the money in force on the last day of the tax period.

The legal interest rate for money established for the year 2020 is 3%.

Related party transactions (art. 41 Law)

In general, in Personal Income Tax, the rules for the valuation of related-party transactions apply in accordance with the terms set out in the Corporate Income Tax Law.