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Practical Income Manual 2021.

Special case of integration of income obtained from the transfer to third parties of own capital from related entities

Regulations: Art. 46 a) Personal Income Tax Law

When the income obtained from the transfer of own capital to third parties comes from entities linked to the taxpayer, the following must be taken into account:

The valuation of these returns must be carried out at the market value.

These returns are integrated into the general base and the savings base following the following rules:

  • General tax base: The amounts corresponding to the excess of the amount of own capital transferred to a related entity with respect to of the result of multiplying by three the own funds, in the part that corresponds to the taxpayer's participation, of the latter.

    For the purposes of computing said excess, the amount of the related entity's own funds reflected in the balance sheet corresponding to the last fiscal year closed prior to the accrual date of Personal Income Tax must be taken into consideration. and the percentage of participation of the taxpayer existing on 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 integrated into the general tax base as indicated above is integrated into the savings tax base.

Related persons or entities:

To determine when there is a link, the provisions of article 18.2 of Law 27/2014, of November 27, on Corporate Tax ( BOE of 28), in which The following are considered persons or related entities:

  • An entity and its partners or participants.
  • An entity and its directors or administrators, except as regards remuneration for the exercise of their functions.
  • An entity and the spouses or people united by family relations, in a direct or collateral line, by consanguinity or affinity up to the third degree of partners or participants, directors or administrators.
  • An entity and the directors or administrators of another entity, when both entities belong to a group.

In cases in which the relationship is defined based on the relationship of the partners or participants with the entity, the participation must be equal to or greater than 25 percent. The mention of administrators will include those in law and those in fact. In cases in which the relationship is not defined based on the partner or participant-entity relationship, the percentage of participation to be considered will be 25 percent.

In these cases, the taxpayer of Personal Income Tax must comply with the documentation obligations of the related-party transactions in the terms and conditions established in Chapter V (articles 13 to 16) of the Corporate Tax Regulations. , approved by Royal Decree 634/2015, of July 10 ( BOE of 11).

See the practical application of this assumption in example on the calculation of the net return on movable capital in the case of assets obtained from the transfer of own capital to third parties, which appears in the following section.