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V2808-16 21 June 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil

Civil societies engaged in livestock activities are not subject to Corporate Tax

A query was raised regarding whether a civil society dedicated to the breeding and fattening of livestock should be subject to Corporate Tax or remain under the income attribution regime. The DGT ruled that, as it is a livestock activity, it lacks a commercial purpose and must continue to be taxed through the attribution of income to its partners.

The question raised

Whether this civil society may continue to apply the income attribution regime provided for in the Personal Income Tax Law or whether it will acquire the status of a Corporate Income Tax taxpayer with effect from January 1, 2016.

The DGT's ruling

To be a taxpayer for Corporate Income Tax, a civil society must possess legal personality and a commercial purpose. Fiscal legal personality is acquired if the society manifests itself before the Administration through a public deed or a private document provided for the assignment of the NIF. A commercial purpose implies performing production, exchange, or service activities within a sector not excluded from the commercial sphere. Agricultural, livestock, forestry, mining, and professional activities are considered outside the commercial sphere.

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