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V3836-15 2 December 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · atribución de rentas

Profits from a German limited partnership (KG) are attributed to the Spanish resident partner

The taxpayer inquires about the taxation of profits from a German limited partnership (KG) in which a resident in Spain holds an interest. The DGT rules that the KG has a legal nature analogous to entities under the income attribution regime, meaning profits are attributed directly to the partner.

The question raised

Question posed: Whether the profit obtained by the German company, and the portion corresponding to its share in the social capital, must be included in the taxable base of the Personal Income Tax of the partner resident in Spain. If so, under which concept and in which tax year it should be included.

The DGT's ruling

The German KG company is an entity subject to the pass-through taxation regime due to having a legal nature analogous to Spanish entities. The attributed income retains the nature of the activity or source from which it originates, although if the partner does not carry out the activity, it could be classified as income from movable capital. The temporal imputation is governed by the rules of Personal Income Tax (IRPF) and double taxation may be eliminated through the deduction provided for in domestic regulations and the treaty with Germany.

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