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Practical Income Manual 2021.

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

Regulations: Art. 46 Law Personal Income Tax

The capital gains and losses that are revealed on the occasion of transfers of assets are part of the savings tax base and must be declared in the corresponding heading of section F2 of the declaration.

The following may be cited as examples:

  • Capital gains and losses derived from transfers or redemptions of shares or participations in collective investment institutions (investment companies and funds).

    These capital gains have been subject to withholding or payment on account of 19 percent in fiscal year 2021. 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 participations traded in 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, for example, compensatory interest.

    In Personal Income Tax the interests received by the taxpayer have different qualifications, depending on their 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 deferral 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 Income Tax Law , it is appropriate to classify them as income from business or professional activity. .

    Unlike the previous ones, the purpose of compensatory interest is to compensate the creditor for damages derived from the breach of an obligation or the delay in its correct fulfillment, as occurs with respect to interest for late payment of salary. 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, relapse in the contentious-administrative cassation appeal (ROJ: STS 4027/2020) establishes the non-consideration of capital gains for late payment interest paid by the Tax Agency when making a refund of undue income referred to in said Judgment, 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 the F2 heading.