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V0414-18 19 February 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · actividad económica

Administrative procedures regarding housing do not constitute a property development activity

The applicant inquired whether purchasing houses under construction and carrying out administrative procedures with the City Council constitutes a property development activity. The DGT ruled that it does not, as there was no material commencement of development activities.

The question raised

Whether it can be inferred from the foregoing that the consulting entity carries out an economic activity of development of land or buildings within the meaning of Article 5 of the LIS.

The DGT's ruling

The mere intention to carry out an activity or the performance of preparatory actions does not constitute its material commencement. In this case, as the activity was limited to administrative tasks regarding dwellings under construction without effective development, no economic activity of development has been carried out.

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