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Practical Manual for Companies 2020.

Profit-making and corporate transfers: application of market value

According to the provisions of article 17.4 of the LIS , the following assets will be valued at their market value:

  1. Those transmitted or acquired for profit . Subsidies will not be considered as such.

  2. The contributed to entities and the securities received in consideration, unless the regime provided for in Chapter VII of Title VII of the LIS is applicable or in the case of operations to increase capital or equity by offsetting credits.

  3. The transferred to the partners due to dissolution, separation of the same, reduction of capital with return of contributions, distribution of the issue premium and distribution of profits.

  4. Those transmitted by virtue of merger and total or partial spin-off , unless the regime provided for in Chapter VII of Title VII of the LIS is applicable.

  5. Those acquired by exchange .

  6. Those acquired by exchange or conversion , unless the regime provided for in Chapter VII of Title VII of the LIS applies.

Filling in form 200

Taxpayers involved in the operations referred to in the previous letters must include in boxes [00347] and [00348] «Profitable and corporate transfers: application of market value (art. 17.4 LIS)» on page 12 of form 200, the adjustments resulting from applying the following rules:

  • The transferring entity must include in its tax base the difference between the market value of the transferred items and their tax value.

  • The partners of said entity will include in their tax base the difference between the market value of the participation received and the tax value of the participation cancelled.

    Remember:

    The market value shall be understood as that which would have been agreed upon under normal market conditions between independent parties, and any of the methods provided for in article 18.4 of the LIS may be admitted.