Skip to main content
Practical Income Manual 2020.

Income subject to imputation

We must distinguish between:

• Income obtained from entities that do not develop economic activities

Regulations: Art. 91.2 of Law Personal Income Tax

Taxpayers will allocate the total income obtained by the non-resident entity in Spanish territory when it does not have the corresponding organization of material and personal means to carry it out, even if the operations are recurring. That is, when it is considered that these entities do not carry out economic activities.

In the case of dividends, shares in profits or income derived from the transfer of shares, in any case, the provisions of the following section will be followed.

Total income will be understood as the amount of the tax base that results from applying the criteria and principles established in the LIS and in the remaining provisions related to Corporate Tax for its determination.

However, the above will not apply when the taxpayer proves that the aforementioned operations are carried out with the material and personal means existing in an entity not resident in Spanish territory belonging to the same group, in the sense of article 42 of the Commercial Code. regardless of their residence and the obligation to prepare consolidated annual accounts, or that their constitution and operations respond to valid economic reasons.

It will be understood that the group of companies referred to in article 42 of the Commercial Code includes multi-group and associated entities under the terms of commercial legislation.

• Income obtained from entities that develop economic activities

Regulations: Art. 91.3 of Law Personal Income Tax

As a general rule and with the qualifications contained in article 91.3 of the Personal Income Tax Law , the resident partner when the total income obtained is not imputable in accordance with what is indicated in the previous section has the obligation to allocate in the general part of the tax base only the positive income obtained by the non-resident entity in Spanish territory that comes from each of the following sources:

  1. Ownership of real estate , rural and urban, or real rights that rest on them , unless they are affected by an economic activity or transferred for use to other non-resident entities, belonging to the same group of companies as the owner in the sense of article 42 of the Commercial Code, regardless of their residence and the obligation to prepare consolidated annual accounts, and are also involved in an economic activity.
  2. Participation in own funds of any type of entity and transfer of own capital to third parties , in the terms provided for in the Personal Income Tax regulations , except for those that comes from the following financial assets:

    • Those held to comply with legal and regulatory obligations arising from the exercise of economic activities.
    • Those that incorporate credit rights arising from contractual relationships established as a consequence of the development of economic activities.
    • Those held as a consequence of the exercise of intermediation activities in official securities markets.
    • Those held by credit institutions and insurance companies as a result of the exercise of their business activities, without prejudice to the provisions of letter g).
  3. Capitalization and insurance operations , which have the entity itself as beneficiary.
  4. Industrial and intellectual property, technical assistance, personal property, image rights and leasing or subleasing of businesses or mines , in the terms established in article 25.4 of the Law of IRPF.

    However, income from image rights that must be attributed in accordance with the provisions of article 92 of the Personal Income Tax Law will not be subject to imputation.

  5. Transmission of the assets and rights referred to in letters a), b), c) and d) above that generate income.
  6. Derivative financial instruments , except those designated to cover a specifically identified risk derived from the performance of economic activities.
  7. Credit, financial, insurance and service provision activities , except those directly related to export activities, carried out, directly or indirectly, with related persons or entities, under the terms of article 18 of the LIS , residents in Spanish territory, as soon as they determine tax-deductible expenses for said resident persons or entities.