Tax treatment of returns in joint account contracts

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the tax nature of profits generated in joint account contracts (contratos de cuentas en participación). This legal figure, regulated by the Commercial Code, involves a participant contributing capital to a manager so that the latter can manage it in a specific business, sharing the results.

What the DGT has ruled

The inquiry analyzes the classification of the amounts obtained by the participant upon the termination of the contractual relationship. The DGT establishes that, when the contribution is made, the ownership of the funds passes to the manager. Therefore, the delivery of these funds to the manager is understood as a transfer of own capital to a third party.

Consequently, the returns derived from this operation are classified as income from movable capital, in accordance with the provisions of Article 25.2 of Law 35/2006 (LIRPF). The tax result will be the difference between the amounts received at the end of the contract and the contributions made, which may be a positive or negative return.

What this means for you

If you act as a participant in a joint account contract, you should bear in mind that the tax administration does not consider these earnings as income from economic activities or as capital gains, but as income from movable capital. This determines the taxable base and the tax rate applicable in your Personal Income Tax (IRPF) return.

This ruling directly affects individuals who decide to contribute capital under this modality, requiring them to declare the difference between what was invested and what was recovered under this specific category.

What you should do

When participating in these types of contractual structures, it is necessary to:

• Verify the correct drafting of the contract in accordance with the Commercial Code.
• Precisely identify the moment the funds are received for their correct integration into the IRPF.
• Assess the particular situation of each investment, as the nature of the returns depends on the legal structure of the agreement.