B Law & Tax
04 March 2024

New jurisprudence on asset-holding companies

According to the Audiencia Nacional in the present case, it can be inferred that, given the circumstances and evidence presented, the plaintiff company is not carrying out an economic activity as defined by the regulations. 

Therefore, it cannot be said that more than 50% of its assets are dedicated to an economic activity.

The Judgment of the Audiencia Nacional of 18 January 2024 analyses whether the entity in question is considered to be a property company and, specifically, whether the lease contract entered into is classified as a lease of a property or a lease of a company.

The question of the type of lease made is relevant to determine whether the company is carrying out an economic activity.

If the lease is of real estate, then it would not be related to an economic activity, unless certain requirements are met, such as having premises and employing a full-time employee. In this case, it would be considered a holding company, as the appellant argues. 

On the other hand, if, as the administration claims, the lease is from a company, then the property would be related to an economic activity. 

This would imply that more than 50% of the company’s assets would be dedicated to an economic activity and, therefore, the company should be taxed under the general corporate regime during the periods in question.

The Audiencia Nacional is inclined to consider that it is a lease of premises for several reasons.

Firstly, the transfer made by CAIXA to another entity did not involve a business or industry, but only premises. The deed of sale available in the file clearly indicates that the property with its permanent premises was transferred, not an operating business.

Secondly, when examining the lease agreement entered into, it is clear that both parties agreed to a lease of premises and not a business lease. This is reflected in the mutual agreement to apply the Urban Lease Law (LAU), which would not be possible if it were an industrial lease governed by the Civil Code. 

In addition, the acquisition and the lease were made on an uninterrupted basis, which supports the idea that what was acquired was leased: a building that CAIXA acquired through foreclosure, not a company.

The lease termination agreement signed on 31 December 2005 does not indicate the termination of a company contract either, as it specifically refers to the termination of the lease by which an entity ‘operated the hotel business’. 

The agreement is limited to what was agreed in the contract, which is the lease of the property, with no mention of the leasing of an industry or business.

Despite the fact that no industry was leased, the applicant company could be considered to be carrying on an economic activity if it meets the requirements of having an affiliated premises and employing a full-time employee. However, in this case, it is concluded that, according to the circumstances and the evidence presented, the company is not carrying out an economic activity within the meaning of the regulations, and therefore it cannot be said that more than 50% of its assets are involved in an economic activity.

As a result, the ruling determines that the liquidation must be annulled, and consequently, also the associated penalty.

B Law & Tax International Tax & Legal Advisors.


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