An individual has requested clarification on whether contributing their share in a community of property to a newly formed company constitutes a contribution of a line of business or a non-monetary contribution for the purposes of applying the special tax regime. The Directorate General of Taxes (DGT) has determined that it does not constitute a contribution of a line of business, but it may qualify as a non-monetary contribution provided certain requirements are met.
Question posed: Whether, in accordance with the preceding facts, the described operation may be considered a non-monetary contribution or a contribution of a branch of activity for the purposes of the special tax regime under Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, specifically regarding the non-inclusion in the Personal Income Tax taxable base of any potential income that may arise as a consequence of the contributions of real estate and material assets to the newly formed company.
The transfer of an ideal share in a community of property is considered a non-monetary contribution pursuant to Article 87.1 of the LIS, rather than a contribution of a branch of activity. To apply the special regime, the contributor must retain at least 5% of the beneficiary entity and the assets must be allocated to economic activities. Furthermore, the community of property must maintain its accounts in accordance with the Commercial Code. The transaction must not have the primary objective of tax fraud or evasion.
What is published here, applied to a company or a specific case. The first meeting is free.