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V1326-20 8 May 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · comunidad de bienes

Special IS regime may apply to property community share contributions under certain conditions

Property owners in a community of property who rent immovable property wish to contribute their share to a company. The DGT examines whether such share contribution may qualify for the special IS regime and whether the reasons are economic.

The question raised

1. Whether the contributions made by each of the co-owners to a new company or to a pre-existing company of their share in the community of property meet the requirements to qualify for the special tax regime of Chapter VII of Title VII of the Corporate Income Tax Act. And whether the alleged reasons may be deemed valid economic motives for these purposes.

The DGT's ruling

The contribution of the ideal share by the co-owners may qualify for the special regime of the Corporate Income Tax Act if the requirements regarding the company's residence, a minimum contribution of 5% per contributor, and allocation to an economic activity with commercial accounting are met. The reasons of professionalization and generational succession may constitute valid economic motives. The transfer shall not be subject to VAT if it constitutes an autonomous economic unit. The non-accrual of the Real Estate Transfer Tax depends on whether the properties are integrated into a line of business.

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