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V4418-16 14 October 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil

Partnerships engaged in livestock farming are not subject to Corporation Tax

A query was raised regarding whether a partnership (comunidad de bienes) dedicated to the breeding and slaughter of livestock is liable for Corporation Tax. The Directorate-General for Taxes (DGT) ruled that, as it is engaged in livestock farming, it lacks a commercial purpose and continues to be taxed through the attribution of income.

The question raised

Whether the consulting company will be a taxpayer for Corporate Income Tax

The DGT's ruling

To be a taxpayer for Corporate Income Tax, a civil society must possess legal personality and a commercial purpose. Fiscal legal personality requires that the agreements are not secret and are manifested to the Administration through a public deed or a private document provided for the assignment of the Tax Identification Number (NIF). A commercial purpose implies performing activities of production, exchange, or services within a sector not excluded from the commercial sphere. Agricultural, livestock, forestry, mining, and professional activities are excluded as they are outside the commercial sphere.

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