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V3958-16 ·20 September 2016 ·consulta-vinculante Medium impact
Tax

No withholding tax required on machinery rentals performed as part of an economic activity

A company sought clarification on whether income from industrial machinery rentals was subject to Corporate Income Tax withholding, or if no withholding was required as it formed part of their economic activity. The Directorate General for Taxes (DGT) ruled that if the rental is carried out as part of an economic activity, there is no obligation to withhold.

In 5 key points

How it affects those involved

This ruling clarifies that businesses providing machinery rentals as part of their core economic activity are exempt from the obligation to apply withholding tax on such transactions.

Lifecycle

2016-09-20PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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