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Practical manual for Income Tax 2020.

Dissolution and liquidation of certain civil companies: Tax deferral regime

Regulations: nineteenth transitional provision of Law IRPF

Delimitation

Civil companies with legal personality and commercial purpose that, prior to 1 January 2016, applied the income attribution regime of IRPF and that, as of that date, met the requirements to acquire the status of taxpayers of Corporate Tax were offered the possibility of validly adopting a dissolution with liquidation agreement in the first six months of fiscal year 2016 and carrying out, after the agreement, within the period of six months following its adoption, all the legal acts or transactions necessary for the extinction of the civil company.

For the partners of the civil society that opted for its dissolution and liquidation, it was established that there was a capital gain when they received credits, money or a symbol that represents it, while for the remaining assets that were awarded to them, taxation was deferred until the time they were transferred, then the gain was determined.

The rules for the valuation of assets and the taxation applicable to the partner based on the result obtained are as follows.

Valuation of assets

The acquisition value and, where applicable, the ownership of the shares or interests in the capital of the civil company that was dissolved, was increased by the amount of the debts awarded and decreased by the amount of the credits and money or token representing it awarded. This is:

(+) Purchase value of shares or interests (1)

(+) Ownership value (2)

(+) Assigned debts

(-) Credits and money awarded

(=) Result

Notes:

(1) In the case of civil companies that have kept accounting adjusted to the commercial code in the years 2014 and 2015 in accordance with the provisions of article 68 of the Personal Income Tax Regulations , it is the price or amount paid for the acquisition of the shares or participations. In the remaining cases, the acquisition value of the shares as of January 1, 2016 will be determined by the difference between the value of tangible fixed assets and real estate investments, reflected in the corresponding record books, and the liabilities payable, unless the existence of other assets is proven. (Back)

(2) In the case of civil companies that have kept accounting adjusted to the commercial code in the years 2014 and 2015 in accordance with the provisions of article 68 of the Personal Income Tax Regulations . (Back)

Taxation based on results

  • Result < 0

  • If the result of the previous operations was negative, their amount should be considered capital gain in the 2016 financial year, setting the acquisition value of the rest of the awarded elements other than credits, money or a symbol that represents it at 0.

  • Result = 0

  • If the result was 0, there was no capital gain or loss. The rest of the awarded asset elements that were not credit, money or a sign representing it, had an acquisition value of 0.

  • Result > 0

  • If the result was positive (greater than 0), there was no capital gain or loss.

The acquisition value of each of the remaining assets awarded other than credits, money or any sign that represents it, was the result of distributing the positive result among them based on the market value resulting from the final balance sheet of the liquidation of the company that was being extinguished.

Date of acquisition of awarded items other than credits, money or a sign that represents it

The awarded elements, other than credits or money, are considered acquired by the partner on the date they were acquired by the civil partnership that was extinguished, in accordance with the nineteenth transitional provision of the Personal Income Tax Law .