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V0613-20 31 March 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · comodato

Free loan of artworks via commodatum does not generate capital income for Personal Income Tax purposes

The query concerns the Personal Income Tax (IRPF) treatment of artworks provided to museums or religious institutions under a loan agreement (commodatum). The Directorate General for Taxes (DGT) rules that if the transfer is free of charge and the works are not tied to an economic activity, no capital income is generated. Furthermore, tax deductions for donations may apply if the recipient entity meets the requirements set out in Law 49/2002.

The question raised

Tax treatment in Personal Income Tax regarding the bailment of works of art to religious institutions or museums.

The DGT's ruling

If it is proven that the transfer of works of art is free of charge, the bailor does not obtain returns on movable capital. To apply the deduction for donations, the transferee entity must be a non-profit entity under the regime of Law 49/2002. In this case, the transfer is considered a donation of rights, allowing for the deduction based on the book value or equity value, subject to the market value limit. Furthermore, capital gains derived from said donation shall be exempt in the donor's Personal Income Tax.

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