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A gym company has enquired whether it must apply withholding tax to external professionals registered in the Economic Activities Tax (IAE) under sports facilities. The Directorate General for Taxes (DGT) has ruled that, as this constitutes a teaching activity, the income is classified as professional and is therefore subject to withholding tax.
Businesses employing external instructors must ensure that withholding tax is correctly applied to their payments, even if the instructors are registered under sports facility categories rather than teaching categories.
The tax team reviews your specific situation.
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