Registration of UTEs in the IAE: the DGT's criteria on group 508

The legal nature of Temporary Joint Ventures (UTE) frequently raises doubts regarding their correct registration in the Economic Activities Tax (IAE). Recently, the General Directorate of Taxes (DGT) has issued a binding ruling to delimit the scope of group 508 of the IAE Tariffs.

What the DGT has resolved

The query sought to determine whether group 508, named "Groupings and Temporary Joint Ventures," encompasses all possible activities of a UTE or if it is restricted to a specific sector. The DGT has resolved that this group exclusively comprises construction activities classified under the 5th division of the tax.

Consequently, if a UTE carries out activities that do not belong to the construction division, it cannot use group 508. In such cases, the grouping must register under the rubrics that correspond to each specific activity it performs.

What this means for you

This criterion establishes a clear distinction between the legal form of the grouping and the economic activity it actually performs. For companies that form part of a UTE, it is fundamental to identify the nature of the work the union is going to execute.

• If the UTE is dedicated to construction (5th division), it will apply group 508 without the obligation to pay a fee.
• If the UTE performs activities other than construction, it must register under the specific rubrics for those activities.
• The registration of the UTE is independent of the taxation that the member companies must maintain for their own activities.

What should be done

It is necessary to verify the classification of the activities that the UTE is going to develop before proceeding with the IAE registration. An error in choosing the group could lead to an incorrect declaration of the economic activity. It is recommended to analyze the division of activities in which the services provided are categorized to ensure that the selected rubric is appropriate according to the IAE Instructions and Tariffs.