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V3744-15 26 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · actividad económica

Property leasing may constitute an economic activity even if management is outsourced to third parties

A query was raised regarding whether property leasing constitutes an economic activity for Corporate Tax purposes. The DGT ruled that if the activity extends beyond mere rental or if management is carried out through the outsourcing of professionals, it is considered an economic activity.

The question raised

Whether the applicants carry out a real estate leasing activity that is considered an economic activity for the purposes of Article 5.1 of the Corporate Income Tax Law.

The DGT's ruling

For the leasing of real estate, an economic activity exists if at least one employee with an employment contract and full-time working hours is used. However, this requirement is also met when management is subcontracted to specialized entities. If the entity carries out activities additional to leasing, such as urban development, the general definition of economic activity under Article 5.1 of the LIS applies.

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