Spanish Corporate income tax regulations foresee a specific scheme for joint ventures (the so – called “Agrupaciones de Interés Económico” – AIEs) whose purpose is facilitating the development or improvement of the partners’ activities, through the performance of auxiliary activities to those of the partners.

Spanish special tax schemes for joint ventures

For this reason, these entities are not taxed under the Corporate income tax but they are regarded as look through entities with regards to their Spanish resident partners.

AIEs constitute an interesting tool for entrepreneurial collaboration, which are worth considering in the current economic context, specially for companies that are in the strong need of improving their results while at the same time continuing with their investments.

✔ As a result of being regarded as look through entities, any profit is taxed at the partners’ level when these are Spanish tax residents. As opposed to Spanish resident partners, AIEs are subject to Spanish Corporation tax only in the part corresponding to non – resident partners that are not established in the Spanish territory.
✔ Whether or not the activities are of an auxiliary nature must be determined by the Commercial registry. An important matter as they may never substitute their partners’ economic activities.
✔ This scheme is not optional and it has to be applied as from the first fiscal year in which the entity has the legal form of an AIE.
✔ AIEs are Corporate income taxpayers and their profit or loss must be calculated following this tax regulations. Profit or tax losses are assigned to its Spanish tax resident partners as well as:

  • financial expenses which may not have been deducted by the AIE due to earning stripping rules,
  • the unapplied capitalization reserve,
  • tax credits or withholding taxes they may have generated / been practiced during the year.

Consequently, tax losses carried forward generated by the AIE can never be offset against the AIE’s own profits in the part assigned to Spanish resident partners.
✔ The assignment is done to the partners having economic rights at the end of the fiscal year, irrespective of their situation through it, in the proportion established in the by laws. Such assignment can be done in the fiscal year subsequent to that of the profit or loss generation, hence achieving a tax deferral when the profit assignment is delayed in one year. Each partner can elect the year of assignment and has to keep this election for a three years period. In their annual Corporate income tax return, AIEs must inform of their partners at the end of the fiscal year as well as of their profit participation.


Publicado el 09-2020 por PBS