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Practical manual for Income Tax 2020.

Capital gains and losses that make up the tax base of savings

Regulations: Art. 46 Law Income Tax

Capital gains and losses that arise from transfers of assets form part of the taxable savings base and must be declared in the corresponding section of section F2 of the tax return.

The following may be cited as examples:

  • Capital gains and losses arising from transfers or reimbursements of shares or interests in collective investment institutions (investment companies and funds).

    These capital gains have been subject to withholding or payment on account of 19% in the 2020 financial year. The amount of these withholdings and payments on account must be declared in the section of the declaration corresponding to withholdings and other payments on account.

  • Capital gains and losses derived from shares or interests traded on official markets.

  • Capital gains and losses derived from other assets such as, for example, real estate, shares not admitted to trading, etc.

  • Other capital gains such as compensatory interest.

    In IRPF the interest received by the taxpayer has different classifications, depending on its remunerative or compensatory nature. Remunerative interest constitutes the consideration, either for the delivery of capital that must be repaid in the future, or for the postponement of payment, granted by the creditor or agreed upon by the parties. These interests will be taxed as income from movable capital, except when, in accordance with the provisions of article 25 of the Personal Tax Law, must be classified as income from business or professional activity.

    Unlike the previous ones, the purpose of compensatory interest is to compensate the creditor for damages and losses arising from the failure to fulfill an obligation or the delay in its correct fulfillment, as occurs with respect to interest for late payment of wages. These interests, due to their compensatory nature, cannot be classified as income from movable capital. Consequently, in accordance with the provisions of articles 25 and 33.1 of the same legal text, they must be taxed as capital gains.

    However, Supreme Court Ruling No. 1651/2020, of December 3, establishes that late payment interest paid by the Tax Agency when refunding undue income referred to in said Ruling is not considered as capital gains, establishing that they are not subject to personal income tax.

  • The quantification of the compensatory interest will correspond to the amount received for this concept and must be declared in box [0389] of the declaration, within section F2.