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V0511-22 14 March 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · autoconsumo de servicios

Free transfer of premises to a relative may be subject to VAT for self-consumption and generate IRPF income

A property owner grants free use of a commercial premises to his daughter, who assumes the property's expenses. The DGT examines whether this transaction is subject to VAT and how it is taxed under the father's Personal Income Tax (IRPF).

The question raised

Taxation under Value Added Tax and under Personal Income Tax.

The DGT's ruling

Regarding VAT, if the assignor is an entrepreneur or professional, the gratuitous assignment of a premises used for their activity is considered self-consumption of services subject to tax. Regarding Personal Income Tax, the amount of expenses assumed by the assignee on behalf of the assignor is computed as gross income from real estate capital, being deductible as an expense. Due to the existence of a kinship, the net income may not be lower than the minimum income established by law.

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