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V0226-16 21 January 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · recargo de equivalencia

Civil companies switching to Corporate Tax will cease to apply the equivalence surcharge regime

A civil company enquired whether it could maintain the equivalence surcharge regime when transitioning from Personal Income Tax to Corporate Tax. The DGT ruled that it must cease using said regime and move to the general VAT regime.

The question raised

Whether said entity may continue to apply the aforementioned special equivalence surcharge regime from January 1, 2016.

The DGT's ruling

The equivalence surcharge regime is limited to natural persons or entities under the income attribution regime of the Personal Income Tax. If the entity begins to be taxed under Corporate Income Tax, it shall cease to be in the special regime and shall be taxed under the general VAT regime. In this case of cessation, it may apply the deduction of the tax liability on its inventoried stocks in accordance with current regulations.

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