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V1295-17 29 May 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · atribución de rentas

Partners in a professional civil society are taxed via income attribution as an economic activity

A group of lawyers has requested clarification on how the partners of their new civil society will be taxed. The DGT has ruled that, as the entity is not subject to Corporate Tax, income is attributed directly to the partners as returns from economic activities.

The question raised

Taxation under Personal Income Tax for each of the partners of the civil society.

The DGT's ruling

Civil societies not subject to Corporate Income Tax are not taxpayers of Personal Income Tax; instead, income is attributed to their partners. These earnings maintain the nature of the entity's economic activity. Payments received by partners for their work in the society are considered an advance on their share of the entity's earnings and not earnings from employment. Attribution is carried out according to the agreements between partners, provided they are reliably documented, or in equal parts if they are unknown.

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