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V4421-16 14 October 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil

Joint ownership communities taxed via income attribution rather than Corporate Tax

A query was raised regarding whether a joint ownership community (comunidad de bienes) engaged in the wholesale trade of bread and pastries is subject to Corporate Tax. The Directorate General for Taxes (DGT) ruled that, as a joint ownership community, it continues to be taxed through the attribution of income to its members.

The question raised

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

The DGT's ruling

To be a taxpayer for Corporate Income Tax purposes, a civil society must have a commercial purpose and legal personality for tax purposes. Legal personality is acquired if the agreements are not secret and are disclosed to the Administration through a public deed or a private document provided for the assignment of a Tax Identification Number (NIF). A commercial purpose implies performing production, exchange, or service activities in a non-excluded sector (such as agriculture or mining). Property communities do not meet these requirements and are taxed under the income attribution regime.

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