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V4883-16 11 November 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sociedad civil con objeto mercantil

Civil companies with commercial purposes and legal personality subject to Corporate Tax

The tax regime for a community of property engaged in bread manufacturing is examined. The DGT clarifies that if the community has a commercial purpose and legal personality, it is subject to Corporate Tax; otherwise, it remains under the income attribution regime.

The question raised

Regarding which tax regime would be applicable to the community of property in direct taxation and in indirect taxation (VAT) as of 01/01/2016. And what would be the tax regime for the relationship between the co-owner and the entity, concerning the income habitually received for the provision of services in the activity and the profits subject to distribution.

The DGT's ruling

To be a taxpayer for Corporate Income Tax, the civil society must have a commercial purpose and legal personality, manifested before the Administration through a public deed or a private document with a Tax Identification Number (NIF). If these requirements are not met, the community of property is taxed under the income attribution regime in Personal Income Tax (IRPF). Regarding VAT, the community of property is a taxable person if it constitutes an economic unit performing business activities. The simplified VAT regime is applicable if the entity is not excluded from the objective estimation regime in Personal Income Tax (IRPF).

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