The higher court has established as a criterion that, in cases of capital reduction with forgiveness of passive dividends before their enforceability, the economic value for calculating the Taxable Base of the Property Transfer Tax and Documented Legal Acts (ITPyAJD) in corporate operations is considered null.
Taxable Base in Capital Reduction: Legal Analysis and Binding Consultation
In both instances, the question raised with cassational interest focused on determining whether, in situations of capital reduction with forgiveness of passive dividends, there exists a taxable base of economic value for the Property Transfer Tax and Documented Legal Acts (ITPyAJD) in the category of corporate operations. If so, it was debated whether the amount of that value could be determined by the quantity in which the obligation to contribute the still pending dividends (passive dividends) is extinguished or reduced.
Both judgments mention a binding consultation from the General Directorate of Taxes (V0839-21) dated April 8, 2021, but clarify that the specific situation of the consultation is not the same as that discussed in the appeal.
In June 2012, the deadline for the payment of the share capital was extended until May 2017. It was proposed to forgive unpaid dividends by reducing the nominal value of the shares. In February 2016, the entity formalized the capital reduction by 5,460,000 euros to forgive the shareholders a pending dividend of the same amount. At that time, the payment was not enforceable, and there was no repayment to the shareholders.
The consultation suggested that, in the capital reduction by forgiving dividends, the taxable base should be the real value of the rights transferred to the shareholders. However, the judgment argues that, in the analyzed case, there was no credit in favor of the company on the date of forgiveness, as the payment was still not enforceable. Therefore, according to the judgment, the taxable base would be zero, in line with the logic of the consultation, as there was no actual patrimonial return or transfer in favor of the shareholders.
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