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V0021-22 4 January 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · arrendamiento con opción de compra

Lease with option to purchase creates two asset changes for Income Tax and alters VAT treatment

A property owner has requested clarification on the tax treatment of a commercial premises lease agreement containing an option to purchase. The DGT clarifies that for Income Tax purposes, two distinct events occur (the granting of the option and the subsequent sale) and that for VAT, the transaction shifts from a provision of services to a supply of goods once the option is exercised.

The question raised

Tax treatment of the amounts received under Personal Income Tax and taxation under Value Added Tax and the Tax on the Increase in Value of Urban Land.

The DGT's ruling

In Personal Income Tax, the granting of a call option constitutes a capital gain taxed as general income, whereas the subsequent sale and purchase represents a new change in assets taxed within the savings base. In VAT, the lease is a provision of services until the lessee commits to exercising the option, at which point it becomes a supply of goods. For a non-developer, the delivery following the exercise of the option is a second supply, subject to tax or exempt as applicable. In Transfer Tax (IIVTNU), the tax accrues on the date of the transfer of ownership resulting from the exercise of the option.

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