Activity 8: Uses that correspond to the transferor in forestry activities carried out under a sharecropping regime

According to the provisions of the Civil Code, the sharecropping contract is governed, among other provisions, by those relating to the partnership contract. Therefore, to the extent that the transferor assumes part of the risks and responsibilities arising from the operation, tax regulations consider him to be an agricultural entrepreneur or direct grower.

The sharecropping contract is one by virtue of which the owner of a farm or exploitation temporarily transfers its use and enjoyment, or that of some of its benefits, as well as that of the exploitation elements, livestock, machinery or working capital, agreeing with the sharecropper transferee to divide the products in aliquot parts in proportion to their respective contributions.

Both the transferor and the sharecropper are farmers and receive income from business activities when the transferor intervenes in the management of means of production and/or human resources. Otherwise, it will be classified as real estate capital gains, such as income received from the ownership of a property.