Back to index
V1290-16 30 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil

Civil societies with agricultural or livestock activities are not subject to Corporate Tax if they lack a commercial purpose

A civil society dedicated to agriculture and livestock has requested clarification on whether it must pay Corporate Tax. The DGT ruled that, despite having legal personality, because it carries out activities excluded from the commercial sphere, it continues to be taxed through the attribution of income under Personal Income Tax.

The question raised

Whether, in accordance with the new regulations, the consulting entity must be subject to Corporate Income Tax. And if the transformation into a limited liability company is mandatory, whether it is possible to dissolve said company and establish a community of property that is taxed under Personal Income Tax.

The DGT's ruling

To be a taxpayer for Corporate Income Tax, a civil society must possess legal personality and a commercial purpose. It is considered to have legal personality if it manifests itself before the Administration through a public deed or a private document provided to obtain a Tax Identification Number. However, agricultural, livestock, forestry, mining, and professional activities are considered outside the commercial scope; therefore, these entities are not subject to Corporate Income Tax.

Book your free first meeting