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Form 100. Personal Income Tax Return 2021

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, co-owners or participants, the following rules shall apply:

  1. As a general rule, the income obtained in the tax period must be determined by the entity in accordance with the Personal Income Tax regulations. However, when all members of the entity under the income attribution regime are taxpayers of the Corporate Tax or taxpayers of the Non-Resident Income Tax with a permanent establishment, the attributable income will be determined in accordance with the Corporate Tax regulations. When all members are taxpayers for the IRNR without a permanent establishment, those of the IRNR.

  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 income from real estate capital in the case of housing leasing (art. 23.2 Law)

    • 30% reduction on net income from real estate, personal property 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 of the Law).

    These reductions that cannot be applied by the entity to calculate the income obtained, may be applied by those members who are natural persons who pay income tax by recording 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 portion of income attributable to partners, heirs, co-owners or participants, taxpayers of this tax, who are part of an entity under the income attribution regime established abroad, will be determined in accordance with the above 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, negative income will be computed to the extent that it does not exceed the amount of positive income obtained in the same country or territory and comes from the same source. Excess negative income will be computed in the following four years, provided that the entity obtains positive income in the same country or territory and it comes from the same source.

  5. The income will be attributed to the partners, heirs, commoners or participants according to the rules or agreements applicable in each case and, if these are not recorded in a reliable manner by the tax authorities, they will be attributed in equal parts.

Withholdings and payments on account supported by the Entity

Income paid to entities in 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 of personal income tax, taxpayers of corporate tax or taxpayers of non-resident income tax. These 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.