New regulations for 2014

Royal Decree-Law 4/2014, dated 7 March, through which urgent measures are adopted on the subject of refinancing and restructuring of business debt.

The second Final Provision of this Royal Decree-Law modifies, with effect for tax periods beginning on or after 1 January 2014, the consolidated text of the Corporate Income Tax Law approved by Royal Legislative Decree 4/2004, of 5 March, establishing the absence of taxation in cases of capitalisation of debts, unless the same has been the subject of a derivative acquisition by the creditor, for a value other than its nominal value. Thus this law expressly states a criterion that had already been accepted by administrative doctrine for specific cases of debt capitalisation among linked organisations.

Similarly, with the aim of establishing an adequate approach to the current economic situation, and preventing taxation from becoming an obstacle to refinancing operations in general, the Corporation Tax Act is modified with regard to the tax treatment of income deriving from a reduction of debt and extension of time derived from applying Bankruptcy Law. Thus, taking into account that neither operation increases the tax capacity of the organisations, a system has been established for imputing income generated in the taxable base according to the financial expenses that are registered later.

Specifically, the modifications introduced by Royal Decree-Law 4/2004 are as follows:

• A paragraph is added at the end of article 15.1, with the following wording:

  "Operations to increase share capital in exchange for loans shall be valued for tax purposes at the amount of the increase from a market point of view, regardless of what the accounting valuation may be".

• The content of article 15.2.b) reads as follows:

  "(b) Contributions to entities and securities received in payment, except for those set forth in the last paragraph of the previous section".

• The first paragraph of article 15.3 is modified, with the following wording:

  "3. In the cases laid out in paragraphs a), b), c) and d), the transferor organisation will integrate into its taxable base the difference between the normal market value of the transferred elements and their book value. However, in the case of a capital increase by debt conversion, the transferring entity will include in its gross tax base the difference between the capital increase amount, in the corresponding proportion, and the fiscal value of the capitalised loan".

• A section 14 is added to article 19, with the following wording:

  "14. The income corresponding to the accounting record of the reduction of debt and extension of time resulting from the application of Bankruptcy Law 22/2003, dated 9 July, will be imputed in the debtor's taxable base as the debtor proceeds later to register financial expenses derived from that debt and up to the limit of the mentioned income.

  However, in the case that the amount of the income referred to in the previous paragraph is more than the total amount of financial expenses pending registration derived from the same debt, the imputation of said income in the taxable base shall be carried out proportionally to the financial expenses registered in every tax period with respect to the total financial expenses pending registration derived from that same debt."

por el que se adoptan medidas urgentes en materia de refinanciación y reestructuración de deuda empresarial.(BOE, 08-marzo-2014)