Permanent establishment and rented buildings

In general, a non-resident person who has leased real estate in Spanish territory is not considered to operate through a permanent establishment in Spain since, according to Spanish tax legislation, the mere leasing of real estate is not one of the cases considered to be a permanent establishment.

However, there will be economic activity carried out through a permanent establishment if any of the following conditions are met:

1. If the property is rented directly by the owner and provides additional or complementary services typical of hospitality such as restaurant, cleaning, laundry and other similar services. These services may be rendered directly or through subcontracts with third parties.

   The following are not considered additional or complementary services: the cleaning services of the apartment provided upon entry and exit of the period contracted by each tenant, the linen changing services in the apartment provided upon entry and exit of the period contracted by each tenant, the cleaning services of the common areas of the building (entrance hall, stairs and elevators) as well as the urbanization in which it is located (green areas, access doors, sidewalks and streets) or the technical assistance and maintenance services for possible repairs to plumbing, electricity, glass, blinds, locksmiths and household appliances.

2. That provisions be made in Spain for the regulation of the activity of at least one person employed with a full-time employment contract.