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V1114-17 10 May 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · comunidades de aguas

Profit distribution by Water Communities in the Canary Islands taxed as income from movable capital

A query was made regarding the Personal Income Tax (IRPF) treatment of profits distributed by a Water Community in the Canary Islands. The Directorate General for Taxes (DGT) has determined that these distributions are classified as income from movable capital.

The question raised

Tax treatment in Personal Income Tax of the amounts received by the members as a consequence of said

The DGT's ruling

The Water Communities of the Canary Islands are entities with legal personality exempt from Corporate Income Tax. The distribution of their profits among natural person members constitutes returns on movable capital pursuant to Article 25.1 of the Personal Income Tax Law. These returns are subject to a 19% withholding tax as an advance payment on the tax.

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