Special case of integration of the returns obtained by the transfer of capital from related entities to third parties
Regulations: Article 46 a) Personal Income Tax Act
When the yields obtained by the transfer of capital to third parties from entities linked to the taxpayer must be taken into account as many as follows:
These returns must be valued at the market value.
These returns are included in the general and savings income, following the following rules:
General tax base: The general tax base will be those corresponding to the excess of the amount of capital transferred to a related entity with respect to the result of multiplying the equity by three, in the part corresponding to the taxpayer's participation, of the latter.
For the purposes of calculating this excess, the amount of the related entity's own funds reflected in the balance sheet must be taken into account corresponding to the last financial year closed before the accrual date of the Personal Income Tax and the percentage of the taxpayer's participation in this date.
Savings tax base: The difference between the market value of these returns and the amount of the part of the return to be included in the general tax base as indicated above are included in the savings tax base.
Related persons or entities:
To determine when there is a link, the provisions of article 18,2 of Act 27/2014 of 27 November on Corporation Tax (Official State Gazette of 28 November), which considers the following persons or related entities:
- An entity and its partners or participants.
- An entity and its directors or directors, except for remuneration for the performance of their duties.
- An entity and spouses or persons bound by direct or collateral relationship, by blood or affinity up to the third degree of the partners or participants, directors or administrators.
- One entity and the directors or directors of another entity, when both entities belong to a group.
In cases where the association is defined according to the relationship of the partners or participants with the entity, the participation must be equal to or greater than 25 per 100. The mention of the directors shall include those of law and those of fact. In cases where the association is not defined according to the relationship between the partners or the entities, the percentage of participation to be considered will be 25%. 100
In these cases, the taxpayer of Personal Income Tax must comply with the obligations to document related transactions in the terms and conditions established in Chapter V (Articles 13 to 16) of the Corporation Tax Regulation, approved by Royal Decree 634/2015 of 10 July (Official State Gazette of 11 July).
See the practical application of this case in the example on the calculation of the net return on movable capital in the case of gains obtained from the transfer of own capital to third parties as set out in the following section.