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Form 100. Personal Income Tax Return 2018

Capital reduction

When the reduction of capital, whatever its purpose, gives rise to the amortization of securities or shares, those acquired first will be considered amortized, and their acquisition value will be distributed proportionally among the remaining homogeneous securities that remain in the taxpayer's assets.

When the reduction of capital does not affect all securities or shares owned by the taxpayer equally, it will be understood to refer to those acquired first.

When the capital reduction is intended to return contributions, the amount of this or the normal market value of the assets or rights received will reduce the acquisition value of the affected securities, in accordance with the rules of the previous paragraph, until their cancellation. Any excess that may result will be taxed as income from movable capital from participation in the equity of any type of entity, in the manner provided for the distribution of the issue premium, unless said capital reduction comes from undistributed profits, in which case all amounts received for this concept will be taxed in accordance with the provisions of section a) of article 25 1. a) of the Law. For these purposes, capital reductions, whatever their purpose, shall be deemed to affect first and foremost the portion of share capital that does not come from undistributed profits, until they are cancelled.

TRANSFER OF SECURITIES AFTER A CAPITAL REDUCTION (DA) 8 Law)

When, prior to the transfer of securities or shares not admitted to trading on any of the official secondary Spanish securities markets, a reduction in capital has occurred by means of a decrease in the nominal value that does not affect all the securities or shares in circulation of the taxpayer equally, the above rules will apply with the following specialities:

  1. The transfer value will be considered to be the value that would correspond to the nominal value resulting from the application of the above rules.

  2. In the event that the taxpayer has not transferred all of his securities or shares, the positive difference between the transfer value corresponding to the nominal value of the securities or shares actually transferred and the transfer value referred to in the previous paragraph will be reduced by the acquisition value of the remaining homogeneous securities or shares, until they are cancelled. The excess could be taxed as capital gain.