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V2659-14 8 October 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportación no dineraria especial

Contribution of ideal shares in a community of property may qualify for the special Corporate Tax regime

Members of a community of property intend to contribute a hotel business to a new company to professionalise management. The DGT examines whether this constitutes a contribution of a branch of activity or a special non-monetary contribution, and its impact on VAT, Transfer Tax, and urban land capital gains tax.

The question raised

Question posed: Whether the contribution of the hotel business by the co-owners, understood as the contribution of an undivided share of the ownership of the property assigned to the hotel activity, can be considered a special non-monetary contribution for the purposes of the provisions of Article 94.1 of the consolidated text of the Corporate Income Tax Law approved by Royal Legislative Decree 4/2004 of March 5.

The DGT's ruling

The individual contribution of each ideal share is not a branch of activity, but rather a special non-monetary contribution pursuant to Art. 94.1 of the TRLIS. To qualify for the special regime, each co-owner must hold at least 5% of the capital and the assets must be assigned to economic activities with commercial accounting. Regarding VAT, the transaction is subject to tax as it is considered a mere transfer of assets, given that it does not constitute an autonomous economic unit. The transaction is exempt from Transfer Tax (ITP) as it constitutes a restructuring, but it is subject to the Tax on Property Transfers, Legal Security and Legal Certainty (IIVTNU) since it does not constitute a branch of activity.

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