Non-managing participants in joint account agreements will be taxed on their returns as financial income

The legal nature of joint account agreements (cuentas en participación) has raised doubts regarding the tax treatment of returns received by entities that do not hold the management of the business. Recently, the Dirección General de Tributos (DGT) has clarified the classification of these amounts within Corporate Income Tax (Impuesto sobre Sociedades).

What the DGT has resolved

The tax administration has established that joint account agreements are configured for tax purposes as a form of external financing for the managing entity. Under this scheme, the non-managing participant contributes capital to participate in a business but has no control over its management.

As a consequence of this classification, the DGT determines that the positive results received by the non-managing participant must be assimilated into financial income. Since they are not considered a share in profits or dividends, the exemption provided for in Article 21 of the Corporate Income Tax Law (LIS) is not applicable.

What this means for you

If your entity acts as a non-managing participant in these types of contracts, the returns obtained cannot benefit from the dividend exemption regime. This implies that:

• The amounts received will increase the taxable base of Corporate Income Tax as financial income.
• It is not possible to apply the reduced imputation regime that is usually applied to profit shares in companies.
• The financing structure of the managing entity directly determines the tax burden of the participant.

What should be done

In the presence of joint account agreements, it is necessary to analyze the nature of the contractual relationship and its impact on the entity's taxation. It is necessary to evaluate whether the financing structure used meets the company's objectives and how it affects the final tax burden. It is recommended to assess each contractual situation individually to ensure that the accounting and tax treatment is appropriate according to current regulations.