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V0139-19 21 January 2019 · SG de Tributación de las Operaciones Financieras Criterion in force
IS · retención

Fees for issuing guarantees are not subject to Corporation Tax withholding when part of an entity's economic activity

A public business entity has enquired whether the fees it receives for issuing guarantees should be subject to withholding tax for Corporation Tax. The DGT has ruled that, as the issuance of guarantees forms part of its economic activity, these fees are not considered income subject to withholding.

The question raised

1. Whether the payment to the taxpayer by the financial institution of the annual risk fee for the guarantee granted to the beneficiary entails withholding as a payment on account of the taxpayer's Corporate Income Tax.

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