Skip to content
Back to index
V3002-14 5 November 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · actividad económica

Small business regime may apply if risks and benefits of hotel operations are assumed

An entity inquired whether operating a hotel by outsourcing management and staff constitutes an economic activity or a mere lease. The DGT ruled that if the entity assumes the risks and benefits and maintains the activity on a continuous basis, it is performing an economic activity.

The question raised

Can it be considered that entity A carries out an economic activity of hotel operation or, conversely, that it only leases the property under a variable price lease to another entity for its operation?

The DGT's ruling

To determine the existence of an economic activity, reference is made to the Personal Income Tax (IRPF) regulations. In the case presented, if the applicant assumes the risks and benefits of the operation and maintains the activity on a regular and continuous basis, it is understood that they are carrying out an economic activity even if the personal resources are subcontracted. However, the reduced rate for maintenance of employment may not be applied if their average workforce is less than one unit.

Book your free first meeting