We are going to review how to tax share issue premiums and contributions from partners’ returns after the tax reform of the IRPF Law 26/2014.

The share issue premium can be understood as the surcharge to be paid for a share in relation to its nominal value. The share issue premium refunds consist, fundamentally, in paying back to the shareholder with charge to reserve for the share issue premium from the funds of the treasury of the company, without there being an alteration of the shareholdings.

Until fiscal year 2015, when a refund of the issue premium was received, that amount did not tax, but reduced the acquisition value of the shares (or company shares), which was particularly beneficial for the shareholder, since it meant a deferral in its taxation, so that it was not taxed until the shares were sold or from the moment in which the acquisition value of these was reduced to zero.

As of fiscal year 2015, after the tax reform, the taxation of this type of income is modified, so that the distribution of the issue premium corresponding to the reserves generated by the entity throughout the period during which the shares are held, will be taxed as return on transferable capital, provided they are entities not listed on regulated markets, with the limit of the positive difference between the value of the equity of the last year closed prior to the date of distribution of the premium and its acquisition value. The excess over this limit will reduce the acquisition value of the shares or participations.

This same treatment is also applicable for the return of contributions from partners.


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