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V3597-20 17 December 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil

Civil companies holding only negotiable securities are not subject to Corporate Tax

A civil company sought clarification on whether its activity of merely holding securities and shares constituted a commercial purpose for Corporate Tax purposes. The DGT ruled that such activity lacks a commercial character and, therefore, the entity is not a taxpayer for this tax.

The question raised

Whether the consulting entity will be a taxpayer for Corporate Income Tax in the 2018 fiscal year, on the grounds that the corporate purpose consisting of the mere holding of negotiable securities and interests in entities 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. Commercial purpose is understood as the performance of an economic activity of production, exchange, or provision of services for the market. The mere holding of negotiable securities and interests does not constitute a commercial activity. Therefore, these entities are taxed through the attribution of income regime under Personal Income Tax.

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