7.5.1.1. Entities in the income allocation system

Income from civil companies that are not subject to corporate tax, unclaimed inheritances, community property and other entities referred to in article 35.4 of Law 58/2003, of December 17, General Tax Law, will be attributed to the partners, heirs, co-owners or participants, respectively, in accordance with the rules of Personal Income Tax.

The income attribution regime will be applicable to entities established abroad whose legal nature is identical or analogous to that of income attribution entities established in accordance with Spanish laws.

The income of entities under the income attribution regime attributed to partners, heirs, commoners or participants will have the nature derived from the activity or source from which they come.

The income attribution regime will not be applicable, among others, to agricultural transformation companies, investment funds of Collective Investment Institutions, Temporary Business Unions, Pension Funds, communities owning local forests and, as of January 1, 2016, to civil companies with legal personality and commercial purpose subject to the LIS . As of January 1, 2022, in order to avoid an inverted hybrid asymmetry, certain entities under the Spanish income attribution regime will become IS taxpayers in Spanish territory for certain incomes.