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V0167-14 27 January 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancias patrimoniales

Competition prizes valued as capital gains in kind based on market value

A company has requested guidance on how to value prizes (gift cards, tablets, trips) awarded in competitions for withholding tax purposes. The DGT has determined that these constitute capital gains in kind and must be valued at their market value.

The question raised

Valuation of prizes for the purpose of determining the amount of withholding tax.

The DGT's ruling

Prizes derived from contests and commercial promotions are capital gains pursuant to Article 33.1 of Law 35/2006. As they constitute benefits in kind, they are valued at market value in accordance with Articles 34, 37, and 43 of the Personal Income Tax Law. Gift cards do not constitute monetary income because they are not exchangeable for cash. For the purpose of withholding tax, the percentage set forth in Article 99.1 of the Regulation is applied to the acquisition value increased by 20 percent.

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