Sale of companies and / or lot participations or shares. Tax value.
In the event of the sale of companies or lots of shares or shares of minority partners whose sale agreement is below the market value, which is most of the cases, the Tax Agency applies its valuation methods that consist of two methods of calculation:
To determine the transmission value, the higher of the following two shall be considered as the transmission value, unless there is evidence that the amount actually paid corresponds to that agreed upon by independent parties under normal market conditions:
A.- Favorable audit report. The valuation will be carried out according to the theoretical value resulting from the last approved balance sheet, provided that this, either on a mandatory or voluntary basis, has been subject to review and verification and the audit report will be favorable.
B.- Unaudited balance or unfavorable audit report. In the event that the balance sheet has not been audited or the audit report is not favorable, the valuation will be made for the highest value of the following three:
- Nominal value
- Theoretical value resulting from the last approved balance sheet
- Value resulting from capitalizing at the rate of 20% the average of the profits of the three fiscal years closed prior to the date of accrual of the Tax.
Dividends distributed and allocations to reserves will be computed within the benefits, excluding those for regularization or updating of balance sheets.
To calculate the capitalization of the average profits, the following formula may be used:
Capitalization = [(B1+B2+B3) /3]*(100/20)
Being B1, B2 and B3 the profits of each of the three fiscal years closed prior to the date of accrual of the tax.
In the first place, before a purchase-sale of shares / and or shares operation, you must know the tax value in order to avoid an inspection and important future penalties, and in the event that the value of the Purchase-sale of shares and / or shares is lower than the values established by the Tax Agency, we recommend that you carry out a VALUATION report – for tax purposes that would expose the corporate-economic reasons that have led to the transaction being traded below its value. The Report has the value of an expert report and will be carried out at the same time as the transmission and will be incorporated both in the deed of sale and in the income statement for the following year.
Said report is also recommended when the corporate operation is carried out by means of a capital reduction or purchase in treasury stock, where the Tax Agency would apply the same valuation methods as in purchase-sales between partners.