The TEAC clarifies the personal income tax treatment to be given to the use of company assets by the shareholder/member

The Central Economic-Administrative Court (TEAC, its Spanish acronym), in its ruling 00/07312/2024 of 24 September 2025, establishes, in a unification of criteria, how the income received by a shareholder for the free use of assets in the company in which he/she participates should be assessed for personal income tax purposes.

Specifically, the court rules on whether the valuation should be carried out in accordance with the rules on related-party transactions or whether the rules governing the allocation and valuation of income in kind should be applied.

In both cases, and in general terms, the valuation must be made at market value, although there may be significant differences. For these purposes, the TEAC distinguishes between two scenarios:

• If the shareholder enjoys free use of assets that have been acquired by the company for use in its ordinary business, this is a related-party transaction and, consequently, the valuation regime for such transactions must be applied.
• If the shareholder enjoys free of charge assets acquired expressly by the company for the shareholder’s enjoyment, the valuation regime for income in kind will apply.

Consequently, for a correct valuation of this type of transaction, it will be necessary to consider the company’s intention at the time of acquiring such assets, which are subsequently transferred free of charge to the shareholder.

The significance of the issue resolved by the TEAC is not limited to a mere classification of income. While the related-party transaction regime allows for the avoidance of regularisation and penalties when the shareholder makes a capital restitution to the company, this restitution is not possible in the case of classification as income in kind.