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I sold shares in 2022: how does it affect me in the Income statement?

Date: March 28, 2023 Time: 07:25:08

When making the 2022 Income it is important to know how it works to know for which income statement must be taxed. Specifically, in Personal Income Tax (IRPF) a distinction is made between the general tax base and savings. In other words, both income from work and economic activities, as well as income derived from investments, are included.

The last part includes income derived from investments. For example, actions. But it is important to know that the obligation to pay taxes is not generated by having these financial assets, but only if it generates income (sale or dividend income).

Specifically, within the savings base, a distinction is made between income from movable capital and capital gains or losses. As explained by the CNMV, “in the case of shares, there is a capital gain if the amount of the sale is greater than that of the purchase and there is a loss if the amount of the sale is less than the amount of the purchase”.

Difference between acquisition and transmission value

Therefore, it is important to take into account the acquisition value and the transfer value. The first represents the value of the sale, deducting the expenses of that operation. While the second term is calculated with the purchase price plus the expenses of the operation. The difference between the two is included in the tax base of savings for the fiscal year in which the sale took place.

Shares may be bought and sold throughout the year. When they are from the same issuer, the Tax Agency applies the ‘First-In, First-Out’ criteria. That is, the titles that are transmitted first are the first to be purchased. Thus, the purchase value to be considered is that of the oldest held in the portfolio.

compensation process

Another option is that, when carrying out different operations, the taxpayer obtains both losses and gains. In this case, they will be increased by compensating the losses up to a limit of 25% of the positive. In addition, the rest of the negative amount may be offset in subsequent returns for four years.

This compensation process includes an exception. The so-called ‘anti-application rule’, which is executed when, in addition to the losses, in the two previous or subsequent months homogeneous shares – issued by the same issuer – have been purchased, which have allowed the equity to be maintained constant. The objective is to use the compensation with a tax benefit.

On the other hand, it must be taken into account that the compensation process is also applied on the basis of savings. That is to say, it is included both in the equity variation and in the income from movable capital separately, as well as among themselves. Thus, in each of the cases, a positive balance and a negative balance will be obtained, which will offset each other. The taxable base of savings will be obtained from the positive balance of the income from movable capital -compensated among themselves- and the positive balance of capital gains -compensated among themselves-.

What fee will I have to pay?

This savings base is important to determine the fee to pay. Based on the result, the tax rates are applied and the tax to be paid is determined. Currently, tax rates range from 19% to 26%.

These percentages are applied progressively in installments based on savings. The first 6,000 euros are taxed at 19%. What remains from 6,000 to 50,000 euros, by 21%. From 50,000 euros to 200,000, the base is taxed at 23%. Finally, for income that exceeds 200,000 euros, 26% is taxed.

To determine the result of the personal income tax settlement, the withholdings made to deduct them must be taken into account. Thus, if the withholdings are higher than the resulting quota to be paid, the investor will receive the excess withheld as a result of the IRPF settlement.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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