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V1188-20 30 April 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · actividad económica

Two part-time employees do not satisfy the economic activity requirement

A residential property rental company enquired whether employing two part-time staff members is equivalent to having one full-time employee. The Directorate General for Taxes (DGT) ruled that this does not meet the legal requirement to establish the existence of economic activity.

The question raised

Whether the requirement to have a full-time worker could be substituted by hiring two people on a part-time basis, with their combined working hours equaling those of a full-time workday.

The DGT's ruling

For the leasing of real estate to constitute an economic activity for Corporate Income Tax purposes, it is required to employ at least one person under a full-time employment contract. This requirement is not considered met by hiring two or more workers under part-time employment contracts, as at least one of them must hold a full-time contract.

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