News published in INFORMA 2017

News published in INFORMA in MAY

When the partners of a civil company with a commercial form decide to turn it into a limited company, which takes place on 30 June in a fiscal year, the income generated from 1/1/2016 is taxed as Corporation Tax, given that the civil company pays Corporation Tax before it becomes a limited company.

In the capitalisation reserve, unless there is a breach of the requirements of article 25 of the Spanish Corporation Tax Act, no quantities should be added to the gross tax base, once the established period has elapsed; in the reserve for capping quantities that would have reduced the tax base, they will be added to the gross tax bases of the tax periods that conclude in the 5 years that immediately follow the conclusion of the tax period in which said reduction is carried out, provided the taxpayer has a negative gross tax base, and up to the amount thereof.

A company acquires plots of land with a view to start developing and constructing buildings, but cannot develop them if the corresponding partial urban development plan is pending approval. The company has not carried out any kind of material activity in relation to the plots, and no planning of material or human means has taken place, therefore the requirements established in article 5 of the Spanish Corporation Tax Act cannot be met, given that the plots are not affected by the land development and construction of buildings.

When a natural person transfers a restaurant activity to a limited company, whereby said person will hold a 30 percent stake, the provision established in letter b) of article 29.1 of the Spanish Corporation Tax Act is not applicable, given that the natural person who performed the activity in the preceding year does not have an equity holding in the new company of more than 50 percent. Nevertheless, letter a) of article 29.1 of the Spanish Corporation Tax Act establishes that an economic activity will not be understood as initiated if it has previously been performed by other related persons, in accordance with the sense of article 18 of the Spanish Corporation Tax Act. Thus, given that an activity performed by an entity has been transferred by a related natural person, the economic activity will not be understood as initiated, and as a consequence the entity will not be able to apply for the tax rate provided for by article 29.1 of the Spanish Corporation Tax Act for newly-created companies.

The Spanish Corporation Tax Act does not contain any qualification criteria that differs from what is established by trade and accounting regulations, in relation to the compensation received by the lessee, therefore, for the purposes of Corporation Tax, said amount will have the corresponding consideration according to this regulation. In this regard, the quantity received by the lessee entity, regardless of the various concepts satisfied, will be considered countable income.