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V1765-20 3 June 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil

Civil companies with commercial purposes may be subject to Corporate Tax and apply the Section 23 reduction if they created the asset

A query was raised regarding whether a civil company can apply the patent income reduction under Article 23 of the Corporate Tax Act. The DGT determines that the company is subject to Corporate Tax if it has a commercial purpose and fiscal legal personality; however, it cannot apply the reduction because it did not create the patent, but rather received it through a contribution.

The question raised

Whether the civil society may apply the reduction provided for in Article 23 of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

To be a taxpayer for Corporate Income Tax, the civil society must have fiscal legal personality (constituted by public deed or private document submitted to the Administration) and a commercial purpose (production, exchange, or service activity). The reduction under Article 23 of the LIS requires that the transferring entity has created the intangible asset in whole or in part; therefore, it is not applicable if the asset has been created by third parties or contributed by a partner.

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