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V0083-24 15 February 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · agrupación de empresas

Unincorporated business groupings are not subject to Corporation Tax

A business grouping established for PERTE projects sought clarification on whether it was liable for Corporation Tax and how to treat its expenses. The DGT ruled that, as it does not carry out economic activity nor meet the criteria under Article 7 of the LIS, it is not a taxpayer; instead, its members are taxed independently.

The question raised

1) Whether the consulting grouping has or does not have the status of a Corporate Income Taxpayer, and if applicable, whether it constitutes a community of expenses, such that its members may directly deduct the proportional part of the common expenses corresponding to them in their Corporate Income Tax settlement.

The DGT's ruling

The grouping is not a taxpayer for Corporate Income Tax purposes as it does not carry out economic activity nor is it provided for in Article 7.1 of the LIS. Common expenses may be deductible for each member individually if they meet the requirements of registration, accrual, and substantiation. In the event of carrying out economic activity, it would be considered an entity under the income attribution regime. The grouping is, however, obliged to perform withholdings when paying income subject to them.

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