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V0351-16 28 January 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil

Civil societies with professional activities are not subject to Corporate Tax

A query was raised regarding whether a civil law firm must pay Corporate Tax and how payments to its partners should be treated. The DGT ruled that, as professional activities are excluded from the commercial sphere, such entities are not liable for Corporate Tax and instead pay via the imputation of income.

The question raised

Whether the consulting entity must be taxed under Corporate Income Tax. If so, what tax treatment applies to the amounts received by the partners of the consulting entity for the provision of their services.

The DGT's ruling

To be a taxpayer for Corporate Income Tax, a civil society must have legal personality before the Administration and a commercial purpose. A commercial purpose is understood as the performance of production, exchange, or service provision activities in a non-excluded sector. Activities of a professional nature are excluded from the commercial scope. Therefore, civil societies with professional activities are taxed under the income attribution regime.

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