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V2154-16 19 May 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil

Partnerships engaged in livestock activities taxed via income attribution rather than Corporate Tax

A query was raised regarding whether a partnership (comunidad de bienes) engaged in poultry farm leasing should be subject to Corporate Tax. The Directorate General for Taxes (DGT) ruled that, as it constitutes a livestock activity, it lacks a commercial purpose and continues to be taxed under the income attribution regime.

The question raised

Whether the community of property described in the facts of the inquiry must be taxed under Corporate Income Tax as of 2016. If so, the tax regime regarding the relationship between the entity and its members.

The DGT's ruling

Civil societies with a commercial purpose are taxpayers of Corporate Income Tax if they possess fiscal legal personality, demonstrated to the Administration through a public deed or a private document with a Tax Identification Number (NIF). A commercial purpose requires performing production, exchange, or service activities in a non-excluded sector. Agricultural, livestock, forestry, mining, and professional activities are excluded. Therefore, communities of property with livestock activities are taxed via the attribution of income regime under Personal Income Tax.

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