diff --git a/apps/files_sharing/lib/Controller/ShareAPIController.php b/apps/files_sharing/lib/Controller/ShareAPIController.php
index 49320d57f16f5..0fbd57b471334 100644
--- a/apps/files_sharing/lib/Controller/ShareAPIController.php
+++ b/apps/files_sharing/lib/Controller/ShareAPIController.php
@@ -216,15 +216,6 @@ protected function formatShare(IShare $share, Node $recipientNode = null): array
 			$result['expiration'] = $expiration->format('Y-m-d 00:00:00');
 		}
 
-		// TODO: It might make sense to have a dedicated setting to allow/deny converting link shares into federated ones
-		// For link shares, we need to have the PERMISSION_SHARE if federated is enabled
-		if ($this->shareManager->outgoingServer2ServerSharesAllowed()) {
-			if ($share->getShareType() === IShare::TYPE_LINK
-				|| $share->getShareType() === IShare::TYPE_EMAIL) {
-				$result['permissions'] |= Constants::PERMISSION_SHARE;
-			}
-		}
-
 		if ($share->getShareType() === IShare::TYPE_USER) {
 			$sharedWith = $this->userManager->get($share->getSharedWith());
 			$result['share_with'] = $share->getSharedWith();
@@ -511,6 +502,11 @@ public function createShare(
 				$permissions = Constants::PERMISSION_READ;
 			}
 
+			// TODO: It might make sense to have a dedicated setting to allow/deny converting link shares into federated ones
+			if (($permissions & Constants::PERMISSION_READ) && $this->shareManager->outgoingServer2ServerSharesAllowed()) {
+				$permissions |= Constants::PERMISSION_SHARE;
+			}
+
 			$share->setPermissions($permissions);
 
 			// Set password
@@ -1055,6 +1051,11 @@ public function updateShare(
 			}
 
 			if ($newPermissions !== null) {
+				// TODO: It might make sense to have a dedicated setting to allow/deny converting link shares into federated ones
+				if (($newPermissions & Constants::PERMISSION_READ) && $this->shareManager->outgoingServer2ServerSharesAllowed()) {
+					$newPermissions |= Constants::PERMISSION_SHARE;
+				}
+
 				$share->setPermissions($newPermissions);
 				$permissions = $newPermissions;
 			}
diff --git a/apps/files_sharing/tests/ApiTest.php b/apps/files_sharing/tests/ApiTest.php
index 365ea8dcb8e59..9e7d8e5c693c6 100644
--- a/apps/files_sharing/tests/ApiTest.php
+++ b/apps/files_sharing/tests/ApiTest.php
@@ -999,7 +999,8 @@ public function testUpdateShareUpload() {
 			\OCP\Constants::PERMISSION_READ |
 			\OCP\Constants::PERMISSION_CREATE |
 			\OCP\Constants::PERMISSION_UPDATE |
-			\OCP\Constants::PERMISSION_DELETE,
+			\OCP\Constants::PERMISSION_DELETE |
+			\OCP\Constants::PERMISSION_SHARE,
 			$share1->getPermissions()
 		);
 
diff --git a/build/integration/sharing_features/sharing-v1.feature b/build/integration/sharing_features/sharing-v1.feature
index eb8006e565b31..51a627dc6dec9 100644
--- a/build/integration/sharing_features/sharing-v1.feature
+++ b/build/integration/sharing_features/sharing-v1.feature
@@ -195,7 +195,7 @@ Feature: sharing
       | share_type | 3 |
       | file_source | A_NUMBER |
       | file_target | /FOLDER |
-      | permissions | 15 |
+      | permissions | 31 |
       | stime | A_NUMBER |
       | token | A_TOKEN |
       | storage | A_NUMBER |
@@ -259,7 +259,7 @@ Feature: sharing
       | share_type | 3 |
       | file_source | A_NUMBER |
       | file_target | /FOLDER |
-      | permissions | 15 |
+      | permissions | 31 |
       | stime | A_NUMBER |
       | token | A_TOKEN |
       | storage | A_NUMBER |