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V0684-22 30 March 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Literary prizes involving transfer of rights are taxed as employment income or business activities

An association inquired whether literary contest prizes are subject to personal income tax (IRPF) withholding. The DGT ruled that if there is a transfer of exploitation rights, they are classified as employment income or professional activity income, depending on the circumstances.

The question raised

Subject to withholding tax on account of Personal Income Tax for prizes.

The DGT's ruling

Prizes for literary works are classified as income from employment if they involve the assignment of exploitation rights, or as income from economic activities if they are carried out within the scope of a professional activity. The applicable withholding tax shall be that established in Articles 80 and 95 of the Personal Income Tax Regulations, regardless of whether the prize winners are minors.

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