Entities in the income allocation system

Positive delimitation

Regulations: Articles 8.3 and 87 Law IRPF . See also arts. 35.4 LGT , 6 LIS and 37 consolidated text of Law IRNR  

The following are considered entities subject to the special income allocation regime, among others:

• Civil companies that do not have legal personality.

• Civil companies with legal personality that do not have a commercial purpose (as of January 1, 2016).

  Until January 1, 2016, the income attribution regime of IRPF was applied to all civil companies. However, as of that date, civil companies with legal personality that have a commercial purpose will no longer be taxed under the indicated regime and will become subject to Corporate Tax.

  As a result of the above, the following civil companies continue to pay taxes under the income attribution regime of IRPF , as their activities are outside the commercial sphere:

  • Those engaged in agricultural, livestock, forestry and mining activities.

  • Those of a professional nature (second section of the Tax on Economic Activities).

  Note: The only taxpayers that are subject to corporate tax are civil companies with legal personality and commercial purpose. The reform does not affect communities of property or other entities without legal personality under article 35.4 of the LGT , which continue to pay taxes as entities in attribution of income in accordance with the special regime regulated in Section 2 of Title X of the Law of IRPF .

  In relation to the LGT see Law 58/2003, of December 17, General Tax.

• Unsettled estates.

• The communities of property.

• Any entity lacking legal personality that constitutes an economic unit or separate assets susceptible to taxation.

• Entities established abroad whose legal nature is identical or analogous to that of entities for the attribution of income established in accordance with Spanish laws.

  The basic characteristics that an entity established abroad must meet to be considered in Spain as an entity in attribution of income for the purposes of IRPF , IS and the Non-Resident Income Tax, are the following:

  1. That the entity is not a taxpayer of a personal income tax in the State of incorporation.

  2. That the income generated by the entity is fiscally attributed to its partners or participants, in accordance with the legislation of its State of incorporation, with the partners or participants being the ones who pay taxes on the same in their personal taxes. This attribution must occur by the mere fact of obtaining the income by the entity, without it being relevant for these purposes whether or not the income has been effectively distributed to the partners or participants.

  3. That the income obtained by the entity in the attribution of income and attributed to the partners or participants retains, in accordance with the legislation of its State of incorporation, the nature of the activity or source from which it comes for each partner or participant.

  Note: See in this regard the Resolution of February 6, 2020, of the General Directorate of Taxes, on the consideration as entities under the income attribution regime of certain entities established abroad ( BOE of February 13).

Note: Non-resident entities that lack a NIF will enter in box [ 1562] the Identification Number assigned to said entities in the Country of residence and will mark box [1563] to indicate this circumstance.

Negative delimitation

Regulations: Art. 7 LIS

following entities, among others, are not included in the special income attribution regime:

• Investment funds, regulated by Law 35/2003, of November 4, on Collective Investment Institutions.

• Temporary business associations, regulated by Law 18/1982, of May 26, on the tax regime of temporary business groups and associations and regional industrial development companies.

• Pension funds, regulated in the consolidated text of the Law on the Regulation of Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29.

• Communities that own communal forests regulated by Law 55/1980, of November 11, on communal forests, or in the corresponding regional legislation.

• Agricultural transformation companies, regulated by Royal Decree 1776/1981, of August 3, which approves the Statute that regulates Agricultural Transformation Companies.

• As of January 1, 2016, civil companies with legal personality and commercial purpose are subject to Corporate Tax.

  The commercial purpose is understood to be the performance of an economic activity of production, exchange or provision of services for the market in a sector not excluded from the commercial scope.

  For these purposes, the activity of renting real estate may have a commercial nature, regardless of whether or not the definition of economic activity provided for in articles 27.2 of the Personal Income Tax Law and 5.1 of the LIS met, so civil companies with legal personality whose activity is the leasing of real estate are taxpayers of Corporate Tax.

• As of January 1, 2022 , entities under the income attribution regime defined below will be subject to corporate tax as taxpayers based on the positive income indicated.

  1. It must be entities in attribution of income in which :

     • one or more entities, linked to each other within the meaning of section 13 of article 15.bis of the LIS , participate directly or indirectly on any day of the year, in the capital, in the equity, in the results or in the voting rights in a percentage equal to or greater than 50% and

     • are residents of countries or territories that qualify the entity under the attribution regime as a taxpayer for a personal income tax,

  2. These entities under the income attribution regime will pay corporate tax, as taxpayer, for the following positive income that must be attributed to all participants resident in countries or territories that consider the income attribution entity as a taxpayer for personal income tax:

     • Income obtained in Spanish territory that is subject to and exempt from taxation in the Non-Resident Income Tax.

     • Foreign source income that is not subject to or exempt from taxation by a tax imposed by the country or territory of the entity or entities paying such income.

  The rest of the income of entities under the income attribution regime will be attributed to the partners, heirs, commoners or participants and will be taxed in accordance with the provisions for this regime in the Personal Income Tax Law , which is discussed in this same Chapter 10 in the following sections.