Skip to content
Back to index
V2175-14 6 August 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidad en régimen de atribución de rentas

German KG profits may be taxed in Spain as foreign establishment earnings

A Spanish company asks whether profits from a German GmbH converted to KG should be attributed as profits from a foreign permanent establishment. The DGT responds that a KG is a rent attribution entity, and its profits are considered business profits obtained through a permanent establishment.

The question raised

1) Whether, once the transformation of the German entity has occurred, the income of said entity must be attributed to GLD as income obtained abroad through a PE in Germany and benefit from the exemption regime provided for in Article 22 of the TRLIS.

The DGT's ruling

The German KG is considered a pass-through entity with a legal nature analogous to Spanish entities. Its profits are classified as business profits which, since the KG lacks its own legal personality, are attributed to the Spanish partner as income obtained through a permanent establishment in Germany. Therefore, the exemption under Article 22 of the TRLIS may be applied if the requirements of business activity, analogous taxation, and non-residence in a tax haven are met.

Book your free first meeting