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V3319-20 6 November 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención

Wealth Tax exemption denied if property leasing lacks a full-time employee dedicated exclusively to the activity

The taxpayer inquired whether shares in a company dedicated to property leasing are exempt from Wealth Tax. The DGT ruled that the activity does not qualify as an economic activity because the hired employee splits their working hours with another employer, failing to meet the requirement of exclusive full-time dedication.

The question raised

Whether, for the purposes of the exemption in Wealth Tax on the shares held by the applicant in the entity, the requirement that the entity carries out an economic activity is deemed to be fulfilled.

The DGT's ruling

For the leasing of real estate to constitute an economic activity and allow for the exemption, it is required to have at least one employee under a full-time employment contract. Said employee must devote the full working day to the management of the lessor's activity. If the employee shares their working day with another employer, the requirement is not met and the income is considered income from real estate capital.

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