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V0660-16 17 February 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · actividad económica

Property leasing constitutes an economic activity even if management is outsourced to third parties

A query was raised regarding whether leasing real estate through a management contract with an external company constitutes an economic activity for Corporate Income Tax purposes. The DGT ruled that if the requirement of having at least one employee under a full-time employment contract is met, the activity is considered economic, regardless of whether management is outsourced.

The question raised

Whether the real estate leasing activity carried out with the previously described means (the existence of a management contract with a related manager who possesses the necessary material and human resources to provide the promised services to the taxpayer) can be classified as an economic activity for the purposes of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

For the leasing of real estate, an economic activity exists when at least one employee is used under a full-time employment contract. In the case of a hotel operation under a leasing regime, it is irrelevant whether management and administration are carried out through the subcontracting of resources to a specialized third party.

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