Concept of income from economic activities
Regulations: Art. 27.1 and 2 Personal Income Tax Law
A. In general
Full income from economic activities will be considered, according to article 27.1 of the Personal Income Tax Law , those that, coming from personal labor and capital together, or from only one of these factors, represent the taxpayer is responsible for organizing on his own account the means of production and human resources or one of both, with the purpose of intervening in the production or distribution of goods or services.
According to this legal wording, the concept of income from economic activities is delimited by the concurrence of the following two notes:
Existence of an autonomous organization of means of production or human resources .
Purpose of intervening in the production or distribution of goods or services .
B. In particular
In particular, they are considered income from economic activities, those that come from the exercise of:
Service provision activities.
Agricultural, livestock and forestry activities.
Liberal, artistic or sports professions.
C. Partners of companies dedicated to the provision of professional services
Income obtained by the contributing partner that meets the following requirements will be considered income from economic activities:
1. That they come from an entity in whose capital they participate, that is, in which the taxpayer has the status of partner.
2. That derive from the performance of professional activities.
These must be the activities carried out by the partner on behalf of the company or provided by the company through its partners. In this activity, two legal relationships must be distinguished generally for tax purposes: that established between the partner and the company, by virtue of which the partner provides his services to the company, constituting the company's remuneration to the partner's income to be included in his Personal Income Tax , and the relationship maintained between the client and the company, whose remuneration paid by the client to the company constitutes income of the company to be included in the Corporate Tax.
3. That said professional activities are included in the Second Section of the Rates of the Tax on Economic Activities, approved by Royal Legislative Decree 1175/1990, of September 28.
Regarding the professional activity that the company must carry out, it includes both the professional companies of Law 2/2007, of March 15, on professional companies ( BOE of March 16), like any other company whose corporate purpose includes the provision of professional services included in the second section of the Economic Activities Tax rates.
Furthermore, it will be necessary that the activity carried out by the partner in the company is precisely the performance of the professional services that constitute the object of the entity, and must be understood to include, within such services, marketing, organizational or team management tasks, and internal services provided to society within said professional activity.
4. That the taxpayer is included, for this purpose, in the special Social Security regime for self-employed or self-employed workers, or in a social security mutual insurance company that acts as an alternative to the aforementioned special regime in accordance with the provisions of the Additional Provision. fifteenth of Law 30/1995, of November 8, on the organization and supervision of private insurance.
See article 305 of the consolidated text of the General Social Security Law, approved by Royal Legislative Decree 8/2015, of October 30 ( BOE of 31), which delimits the field of application of the Special Social Security Regime for self-employed or self-employed workers.
Otherwise (that is, if it is included in the general Social Security regime), the classification of such services must be that of personal work in accordance with the provisions of article 17.1 of the Personal Income Tax Law .
Without prejudice to the above and regardless of the nature of the remuneration corresponding to said services, it must be taken into account that since these are operations between related persons or entities, they will be carried out at their market value, in the terms provided in the article. 18 of Law 27/2014, of November 27, on Corporate Tax.
In accordance with article 18 of the LIS the linking relationships occur in the operations carried out between:
- An entity and its partners or participants,
- An entity and its legal and de facto directors or administrators,
- An entity and the spouses or persons united by kinship relations in a direct or collateral line, by consanguinity or affinity up to the third degree of the partners or participants, directors or administrators,
- An entity and the directors or administrators of another entity, when both entities belong to a group.
When the relationship is defined based on the partner-company relationship, the partner's participation must be equal to or greater than 25 percent.
In the case of remuneration for the exercise of their functions as directors or administrators of entities, the rules of relationship relationships are not followed, because this is expressly established in article 18.2 of the LIS , and therefore said remunerations are excluded from the scope of related-party transactions regulated in article 41 of Law Personal Income Tax .
D. Lease of real estate
It is considered that the leasing of real estate is carried out as an economic activity, only when at least one person employed with a full-time employment contract is used for its management.