8.1.1.2. Calculation of attributed income and payments on account

Calculation of attributed income

To calculate the income to be attributed to each of the partners, heirs, community members or participants, the following rules will apply:

1. The income obtained in the tax period must be determined by the entity in accordance with the Personal Income Tax regulations. However, when all the members of the entity under the income attribution regime are taxpayers of Corporate Tax or taxpayers of the Income Tax of non-residents with permanent establishment, the attributable income will be determined in accordance with the rules of the Tax on Societies.

2. The following reductions on the net income provided for in Personal Income Tax will not be applicable by the entity when calculating the income obtained:

   • 60% reduction on net returns on real estate capital in the case of housing rentals (art.23.2 Law)

   • 30% reduction on the net income from real estate capital, furniture or economic activities with a generation period of more than two years or obtained in a notoriously irregular manner over time (arts.23.3, 26.2, and 32 Law).

   Note:

   These reductions, which cannot be applied by the entity to calculate the income obtained, can be made by those members who are natural persons who pay personal income tax by entering them in the corresponding boxes of the declaration, boxes: 1567, 1573, 1574, and within the attribution of economic activities, boxes 1580,1581,1582),

3. The part of income attributable to partners, heirs, community members or participants, taxpayers for this tax, who are part of an entity under an income attribution regime established abroad, will be determined in accordance with the previous rules.

4. When the entity obtains income from a foreign source that comes from a country with which Spain has not signed an agreement to avoid double taxation with an information exchange clause, the negative income will be computed to the extent that it does not exceed the amount of the income. positive results obtained in the same country or territory and come from the same source. The excess of negative income will be computed in the following four years, to the extent that the entity obtains positive income in the same country or territory and they come from the same source.

5. The income will be attributed to the partners, heirs, community members or participants according to the rules or agreements applicable in each case and, if these are not confirmed to the Tax Administration in a reliable manner, they will be attributed in equal parts.

Withholdings and payments on account supported by the Entity

Income paid to entities under attribution will be subject to withholding or payment on account, in accordance with the rules of this Tax, regardless of whether all or any of its members are taxpayers for Personal Income Tax, taxpayer of Corporate Tax or taxpayer for the Income Tax of non-residents. Said withholdings or payments on account will be deducted in the declaration of each of the members, in the same proportion in which the income is attributed.