Skip to content
Back to index
V0017-25 7 January 2025 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · cuentas en participación

Retention on participation accounts applies to positive monthly results less prior negative results

An entity asked whether the retention base in a participation account contract should be the positive monthly result or the net result after offsetting prior losses. The DGT replied that retention is applied to positive monthly results reduced by prior negative results.

The question raised

Question posed: Whether the base upon which the payer must apply the withholding tax, consisting of the full or due consideration paid, should be, in the scenario presented, the positive result of each month reduced, if any, by the negative results of settlements from previous months, or conversely, whether the withholding should be applied to the positive result without reducing it by the negative results of previous months.

The DGT's ruling

In joint account contracts, the managing entity must withhold tax on the income paid to the participating entity. The withholding base shall be the positive returns of the current month, reduced, where applicable, by the negative results of previous months. The obligation to withhold arises at the moment the income becomes due as agreed in the contract.

Email
Contact