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Practical Manual of Companies 2020.

Profit-making and corporate transfers: application of market value

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

  1. Those transmitted or acquired for profit . Subsidies will not have this consideration.

  2. The contributed to entities and the values 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 own funds for compensation of credits.

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

  4. Those transferred by virtue of merger and total or partial division , 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 model 200, the adjustments derived from applying the following rules:

  • The transferring entity must integrate into its tax base the difference between the market value of the transferred elements and their tax value.

  • The partners of said entity will integrate into their tax base the difference between the market value of the participation received and the tax value of the canceled participation.

    Remember:

    Market value will be understood as the value that 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 accepted.