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V1747-24 16 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · atribución de rentas

Joint ownership of an economic activity by two individuals is taxed via income attribution

A taxpayer inquired whether their son and son-in-law could register individually to split the income and expenses of an activity 50/50. The DGT ruled that this constitutes an entity under the income attribution regime.

The question raised

Whether your son and son-in-law can register individually and split the income and expenses of the activity fifty percent each, determining the net yield through the simplified direct estimation method.

The DGT's ruling

The joint ownership of an economic activity by two natural persons, without the formation of a commercial company, implies that they shall be taxed under the income attribution regime. Income is determined at the entity level and is attributed to the partners according to the applicable agreements or, if not reliably documented, in equal shares. To apply the simplified direct estimation method, all partners must be natural persons subject to Personal Income Tax (IRPF).

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