Spain amends tax treatment of debt restructuring


As a result of a substantial reform of the Insolvency Law, starting January 1, 2014  the tax treatment of debt restructuring modifies both Spain's Corporate Income Tax Law and its stamp duty regulations.


Capital increase by debt conversion

No taxation arises from debt capitalization, unless the creditor acquired the same by transfer of title, for any value different than the face value.

Tax treatment of profits derived from debt restructuring

Income derived from any debt release or settlement, under the Insolvency Law, will be included in the debtor's taxable base, when the financial expenses derived from any such debt were to be registered, up to the limit of income above.

If such income is greater than the financial expenses pending to be registered, the income would be allocated proportionally.

As a consequence, income is not taxed upon the release being agreed, but on registration of the financial expenses derived from the relevant debt.


From 9 March 2014, any deed supporting debt releases, loan or credit reductions, or any other obligations set forth in refinancing agreements or extrajudicial payment agreements, as provided for under the Insolvency Law, is exempt from stamp duty, provided that the taxpayer is the debtor.


Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© DLA Piper | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.