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V2776-17 27 October 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil

Civil companies holding only financial investments are not subject to Corporation Tax

A civil company whose corporate purpose is solely the ownership of financial investments has queried whether it must pay Corporation Tax. The DGT has ruled that it is not a taxpayer because the mere ownership of investments does not constitute a commercial purpose.

The question raised

Whether the consulting company will be a taxpayer for Corporate Income Tax, on the grounds that the mere ownership of investments in financial instruments constitutes a commercial purpose.

The DGT's ruling

To be a taxpayer for Corporate Income Tax, a civil society must have legal personality and a commercial purpose. A commercial purpose requires the performance of an economic activity of production, exchange, or provision of services for the market. The mere ownership of investments in financial instruments does not have a commercial character. Therefore, if the civil society does not carry out a commercial economic activity, its income shall be attributed to the partners.

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