Organisations under the income allocation system

Calculation of the income attributable to each partner, heir, commoner or participant

1. When any member of the entity is a natural person who pays IRPF the entity will calculate the net income to be attributed to its members:

   • In accordance with the rules established in this tax for:

     • the returns on real estate and personal property capital
     • the returns from economic activities
     • capital gains and losses
     • real estate income imputations

   • In accordance with the temporary imputation rules established in the IRPF.

   • Without applying the corresponding reductions to those returns.

2. The members of the entity will apply in their personal income tax returns, if they meet the requirements, among others, the reductions for:

   • Net income derived from the leasing of real estate for residential purposes
   • Net returns from real estate, personal property or economic activities with a generation period of more than two years or obtained in a notoriously irregular manner over time
   • net returns derived from the start of an economic activity

3. The members of the entity will include in their declarations the withholdings or payments on account imputed by it.