You are here

Analysis of the New Tax on Non-Productive Assets of Legal Persons

Noemí López's picture
Published: 07/02/17 - Country: Spain

Recently, the group "Juntos por el Sí" and "CUP" have presented to the Catalan Parliament a proposal for a Law on the new "Tax on the non-productive assets of legal entities", which the Parliamentary Bureau has admitted to processing.

What do you want to record this new tax?

For if it ends up coming into force (and everything seems to be the case), the new taxable event will be the possession, by legal entities and civil companies with a commercial purpose at the date of accrual of the tax, the following assets when Are non-productive and are located in Catalonia :

  • property
  • Motor vehicles of 200 hp or more
  • Recreational craft of eight meters in length or more
  • Aircraft

The law specifies that a non-productive asset is one that is not directly affected by any economic activity, is intended for private use or use or, in the case of goods intended for rent, are used by certain related or non-attached persons Are subject to commercial exploitation.

As far as real property is concerned, ownership, usufruct, use or possession shall be subject to the tax when leased to the owners, partners or participants of the legal entity or persons or entities related to them, understood by persons Or related entities that are for the purposes of Corporate Income Tax.

Therefore, at this point, it will be important to see if people who, a priori, can be considered linked, are included in the specific case. In this context, it should be remembered that according to Corporate Income Tax, the following are linked:

A) An entity and its partners or participants.

B) An entity and its directors or administrators, except in the one corresponding to the remuneration for the exercise of its functions.

C) An entity and the spouses or persons united by relationship of kinship, in direct line or collateral, by consanguinity or affinity up to the third degree of the partners or participants, advisers or administrators.

D) Two entities belonging to a group.

E) One entity and the directors or managers of another entity, when both entities belong to a group.

F) An entity and another entity which is indirectly owned by the former in at least 25% of the capital stock or of its own funds.

G) Two entities in which the same partners, partners or their spouses, or persons united by relationship of kinship, in direct or collateral line, by consanguinity or affinity up to the third degree, participate, directly or indirectly, in at least the 25 percent of the share capital or own funds.

H) An entity resident in Spanish territory and its permanent establishments abroad.

It should be taken into account that, in cases where the relationship is defined according to the relationship of the partners or participants with the entity, the participation must be equal to or greater than 25 percent. In addition, the mention of the administrators will include both the right and the de facto.

There is one exception to take into account: the tax does not apply in those cases where the person who owns the property is a worker of the non-owner, non-member, or participant society.

According to the foregoing, and regardless of whether the company leases other real estate to third parties, those who are assigned to linked, would be subject to tax.

In addition, as already mentioned, non-productive assets are also included as properties which, despite being rented to unrelated persons, are not subject to commercial exploitation.

Interestingly - and this, as we will analyze, can become a very important gap in the interpretation of the regulations -, the law does not determine to these effects that it should be understood by commercial activity.

If we choose to equate commercial activity with economic activity, we already know how this issue has been conflicting. Let us briefly recall:

  1. On the one hand we have the regulations, which, pursuant to article 5 of Law 27/2014, of November 27, on Corporate Income Tax (hereinafter LIS) regulates that in the case of leasing of real estate, it will be understood that there is only economic activity When at least one person employed with a full-time employment contract is used for their management.
  2. And on the other hand we have its interpretation, which ranges from:
  3. The resolutions of the TEAC and the binding consultations of the DGT which indicate that the concurrence of a person hired labor and full-time in order that the activities of leasing real estate have the status of economic activity, does not imply a presumption iuris et de iure , But a presumption iuris tantum of the exercise of these activities, because if there is not a workload necessary and sufficient to dispose of a worker, their concurrence can be described as unnecessary for the income. 
    That is, the TEAC configures the requirement to have at least one worker hired eight hours as a minimum requirement, although not necessarily sufficient if it is believed that the workload generated by the activity does not justify having a person hired eight hours, Therefore, only be held to comply with the formality required by law (in this sense, and among others, TEAC -03-12-2009 (RG 254/06), 17-03-2010 (RG 4559/2006), 28 -05-2013 (RG 4909/2009) and 2-06-2015 (RG 6320/2011) - or DGT CV 2699/2013 and 3017/2016.
  4. On the other hand, other resolutions of the TEAC, the DGT and certain Jurisprudence admit the possibility that the personnel employed may be hired externally, for example through the use of a property manager with personnel (in this sense and among others TEAC-28-05-13, DGT V339-15 and 3549-15, TSJ Murcia 10-03-16 and TS 2-02-12).

This ambiguity, which is now still in the Corporate Tax, will be transferred to the new Catalan tax if the final wording is not remedied.

As regards the tax base of the future Catalan tax, it will be constituted by the sum of values ​​corresponding to all non-productive assets, with deduction of charges and levies of a real nature, when the value of the assets and rights subject and not Exempt from tax.

As for the valuation of the assets, the proposal of law establishes the application of specific rules. In particular, in the case of immovable property and the rights that are levied on them, the valuation will be computed according to the rules of valuation of the Tax on the Patrimony.

To this end, we must refer to article 10 of Law 19/1991, of June 6, on the Tax on Patrimony (hereinafter LIP), which establishes that urban property shall be computed at the highest value of Following three:

  • The cadastral value
  • The one verified by the Administration for the purposes of other taxes
  • The price, consideration or acquisition value

In relation to the deduction of charges and levies of a real nature that diminish the value of the good, we must take into account that the law refers to charges such as censuses, pensions or easements. While mortgages or garments are actual collateral charges, they affect the good to the payment of an amount (for example derived from a debt) but do not diminish its real value.

In order to determine the basis it is very important to know that there is an exemption on the taxable amount of 500,000 euros or, of 100,000 euros, if no real estate is included in the non-productive assets.

Finally, mention that the established tax rate is progressive and ranges from 0.25% to 1%, accruing in any case on June 30 of each year.

This bill is framed within the budget negotiation that are being carried out by the CUP and Together for Yes by the budgets of the Generalitat of 2017, and its intention is the processing in the Parliament, parallel to the processing of the accounts as a Specific law.

Subscribe to The Journal

* indicates required
Areas of Interest

Pragma International will use the information you provide on this form to be in touch with you and to provide updates and marketing. Please let us know all the ways you would like to hear from us:

You can change your mind at any time by clicking the unsubscribe link in the footer of any email you receive from us, or by contacting us at We will treat your information with respect. For more information about our privacy practices please visit our website. By clicking below, you agree that we may process your information in accordance with these terms.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.

Article Rating: 
Average: 4.4 (11 votes)
Total reads: 2,446
Noemí López's picture

Ms. López has been working at Manubens Abogados since February 2015. She graduated in Law from the University of Barcelona, and after, she took the Master's Degree in Access to Law at the same university. She also have a Master of specialization in the area of Taxation and Tax Consulting at the Center for Financial Studies of Barcelona and a Monographic Course on Fiscal Consolidation at the Center for Financial Studies in Barcelona.
The main areas in which she develops her professional activity are fiscal consolidation, as well as the study and analysis of all the aspects that surround the family business structure.
She advises individuals and legal entities in matters related to tax law.

Areas of Practice

Economic Sectors