Divergence of Values in Capital Gains (Article 52 IRS): When the Tax Authority Can Correct Your Sale Price

Selling shares in a company for a low price — or for a symbolic amount? Under Article 52 of the IRS Code, the tax authority can correct the sale value declared for capital gains purposes when it has well-founded reasons to believe it doesn’t match the real value of the transaction. It’s an anti-abuse rule that matters especially for sales of quotas and unlisted shares. Here’s how it works.

📜 The Rule

When the tax authority considers, on well-founded grounds, that there may be a divergence between the value declared and the real value of a transfer, it can correct the value used to calculate the capital gain.

For shares and quotas in unlisted companies, the law provides a criterion to quantify the correction — notably, the value of the corresponding share of the company’s equity in the last balance sheet.

⚖️ What the Courts Say

The courts — including the Supreme Administrative Court (STA) — have clarified that:

  • The tax authority must first demonstrate, with concrete facts, that there’s a real divergence between the declared value and the real value
  • The equity value criterion serves only to quantify the correction once the divergence is established — it can’t by itself prove the divergence
  • A simple difference between the price and the book value isn’t enough — the authority must justify why it believes the price isn’t real

This protects taxpayers from automatic corrections based only on the balance sheet.

🏠 And Property?

For real estate, there’s a separate rule: the VPT used for IMT or Stamp Duty is the minimum sale value for capital gains purposes (Article 44). If the real price was lower, you can prove the actual price through a specific procedure (based on Article 139 of the IRC Code), which may involve lifting bank secrecy.

🔍 Typical Situations

  • Selling quotas for the nominal value when the company has significant reserves or assets
  • Symbolic prices (€1) for shares in a company with positive equity
  • Sales within the family at prices below the company’s value
  • Sales just before a distribution of profits or a liquidation

🛡️ How to Protect Yourself

  • Justify the price: independent valuation, negotiation records, debts or liabilities not reflected in the balance sheet
  • Explain the context: losses, contingencies, market conditions
  • Keep the documents for the whole audit period
  • If you’re corrected: you can challenge the assessment (administrative complaint, arbitration or court), arguing the authority didn’t prove the divergence

🔗 Related Rules

  • Related parties: sales to related entities must follow arm’s length terms (transfer pricing rules)
  • Micro and small companies: only 50% of the gain is taxed — but the sale value can still be corrected

💡 Practical Tips

  • Never sell at a symbolic price without a documented reason.
  • Consider distributing reserves before selling, if appropriate — with its own tax cost.
  • Get a valuation for unlisted shares, especially in family transfers.

🚀 Final Considerations

Article 52 lets the tax authority correct sale values that don’t reflect reality — but it must first prove the divergence with concrete facts. A well-documented price is the best protection.

📢 Expert Advice: If you’re selling quotas below their book value, prepare a written justification and a valuation before signing. It’s much harder to build them after a notification.

Selling shares or quotas in Portugal? Step Inside Portugal’s tax team can help you document the price and calculate the tax — find out more about our tax services here. ✨


This article is for general information only and doesn’t constitute tax or legal advice. Case law on Article 52 continues to evolve.

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