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V0310-14 10 February 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · arrendamiento de negocio

Withholding tax applies to the lease of an industrial warehouse including facilities and equipment

A company has requested clarification on whether the lease of an industrial warehouse, including its facilities, equipment, and stock, is subject to Corporate Income Tax withholding. The Directorate General for Taxes (DGT) has determined that, as it does not meet the requirements for a business lease, it constitutes a real estate lease subject to withholding.

The question raised

Whether the lease of the industrial warehouse, together with its facilities, must be subject to withholding tax.

The DGT's ruling

The lease of a warehouse with material means does not constitute a business lease if human resources or a complete organizational structure that allows for the immediate exploitation of a patrimonial unit with its own life are not transferred. As it is a lease of urban real estate, there is an obligation to apply withholding tax on the total amount of the income, unless the exceptions in article 59.i of the RIS apply.

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