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V0080-22 19 January 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · arrendamiento de negocio

Leasing of rural land for parking or markets is subject to VAT and exempt from IRPF withholding

A query was made regarding the tax classification and IRPF withholding for the leasing of rural land for use as a market and parking area. The DGT has determined that the transaction is subject to VAT and, as the land is rural, it is not subject to IRPF withholding.

The question raised

Subjection to withholding of income received under Personal Income Tax and the subjection of said operation to Value Added Tax.

The DGT's ruling

The lease of rural land as an isolated element is not subject to Personal Income Tax (IRPF) withholding, regardless of whether it generates income from economic activities or from real estate capital. Regarding VAT, the lease of land for vehicle parking or for the installation of elements of a business activity, such as a street market, is a service provision subject to the tax and not exempt.

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