The Central Economic-Administrative Tribunal (CEAC) has issued Resolution No. 02501/2023, of 25 March 2026, in which it expressly amends its previous doctrine on the requirements to be met by the partners of a Temporary Business Union (UTE) in order to be able to apply the exemption provided for in Article 50 of the consolidated Corporate Tax Act (TRLIS, RDLeg 4/2004) on the income charged to them when the TEU operates abroad.
This change of criterion has a significant practical relevance for all companies that participate or have participated in UTEs with projects abroad during the years in which the TRLIS was implemented, i.e., generally up to the financial year 2014.
The exemption from Article 50 TRLIS and UTEs
Temporary Business Unions are fiscally transparent entities: the income generated is charged directly to its partnersArticle 50 of the TRLIS provided for an exemption from those income charged when the TEU was operating abroad.
The interpretative question that has generated conflict over the years is precisely what should be understood by “operating abroad”: does the physical presence of the TEU in the country where the project is being implemented demand the physical presence of the TEU? Or does it suffice for the project itself to be developed abroad, even if part of the work is carried out from Spain?
The previous position of the Inspection, TEAR and TEAC itself
Until this decision, both the Finance Inspectorate and the Regional Economic and Administrative Tribunal (TEAR) and its own TEAC– in their resolutions of 6 November 2014 and 19 December 2022 they maintained a restrictive interpretation: in order for the TEU partners to apply the exemption, the TEU must have sufficient material and personal means abroad to carry out its activity there.
With this in mind, the Inspectorate proceeded to regularize the situation of the companies members of the TEU, eliminating the negative exemption adjustments that they had made in their self-liquidation of the company tax for the financial year 2014.
The change of criteria of the TEAC: what the resolution of 25/03/2026 says
In the resolution of March 25, 2026, the TEAC gives an express twist to its previous doctrine and aligns itself with the jurisprudence of the National High Court, in particular with its judgments of December 28, 2019 and January 27, 2023.
The new criterion of the TEAC, applicable to the years in which the TRLIS applies, provides as follows:
No need for permanent establishment or direct material execution abroad
The requirement to “operate abroad” contained in Article 50 TRLIS does not necessarily imply that the TEU must have a permanent establishment in the country where the project is carried out, nor that all material activity is carried out physically abroad.
This interpretation is based on two pillars:
- A grammatical reading of Article 50 TRLISwhich does not contain any express reference to the concept of permanent establishment.
- A systematic interpretation: Law 27/2014 (LIS), which replaced the TRLIS from 2015, expressly introduced the reference to Article 22 (permanent establishment).The fact that the legislator considered it necessary to introduce such a reference when reforming the rule confirms that the TRLIS did not include it.
A functional link to the external project is sufficient
According to the new criterion, it is sufficient for the TEU to participate in a project that is executed abroad, although a substantial part of the manufacturing or services is carried out in Spain, provided that a functional link exists with such an external project.
In practice, this means that:
- The TEU may manufacture part of the components or provide part of the services from facilities located in Spanish territory.
- The decisive thing is that the project to which the activity of the TEU serves has its execution abroad and that the contribution of the TEU is functionally linked to that project.
- There is no need for the TEU to have displaced personnel or its own facilities in the country of destination.
Temporary scope: exercises under the TRLIS (until 2014)
It is essential to stress that the change in the criteria of the TEAC is expressly limited to the exercises in which the TRLIS was applied, i.e., generally, the exercises started before 1 January 2015.
As of 2015, with the entry into force of Law 27/2014 on Corporate Tax, the regime changes: the LIS does refer expressly to Article 22 and incorporates the requirement of permanent establishment for the application of the exemption in the field of UTEs operating abroad.
In summary:
- Exercises until 2014 (TRLIS): the new TEAC criterion is applied. No permanent establishment is necessary; the functional link to the external project is sufficient.
- Exercises since 2015 (LIS 27/2014)The exemption for TEU partners abroad requires permanent establishment by express reference to Article 22 LIS.
Practical implications for TEU partner companies
This change of criterion may have significant consequences for those companies that were regularized by the Inspectorate under the above criterion.
- If a company was regularised by the Inspectorate for applying the exemption under Article 50 TRLIS in a financial year prior to 2015, and provided that the settlement has not become final, this TEAC Resolution may be decisive for the resolution of the dispute.
- The ongoing procedures in which this issue is discussed under the TRLIS regulations should take into account the new doctrine of the TEAC, which links the bodies implementing the taxes.
The ECEC resolution of 25 March 2026 represents a change of express and relevant corporate tax criterion for the members of UTEs active abroad under the TRLIS. By aligning themselves with the jurisprudence of the National High Court and adopting a grammatical and systematic interpretation of Article 50 TRLIS, the TEAC concludes that “operating abroad” does not require permanent establishment or full material execution abroad, but that the functional link with the external project is sufficient.
This is a doctrine that links the tax administration and can affect regularizations practiced with the previous criterion that have not become firm. We recommend analyzing each specific case.
Summary of the resolution
- Resolution: TEAC No 02501/2023 of 25 March 2026
- Subject: Company Tax. Exemption Article 50 TRLIS (RDLeg 4/2004)
- Temporary scope: Exercises under the TRLIS (until 2014)
- Previous doctrine modified: ECEC Resolutions of 6-11-2014 and 19-12-2022
- Reference case law: National High Court, judgments of 28-12-2019 and 27-1-2023
