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V0716-23 24 March 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · elemento patrimonial afecto

Sale of a client portfolio is subject to VAT and taxed in Personal Income Tax based on the final price

A professional has requested a ruling on the tax treatment of selling a client portfolio where the final price is determined after several payments. The Directorate-General for Taxes (DGT) has ruled that for Personal Income Tax purposes, the final price must be declared in the year of the transfer, and that the transaction is subject to VAT, with tax amounts subject to adjustment if the final price changes.

The question raised

Tax treatment in Personal Income Tax and Value Added Tax regarding the sale of a client portfolio.

The DGT's ruling

In Personal Income Tax (IRPF), the client portfolio is an asset assigned to the business activity, and its sale generates a capital gain or loss that must be attributed to the tax period of the transfer using the final price. In Value Added Tax (VAT), the transfer of the portfolio is a taxable supply of services, which accrues at the time of the transfer or upon advance payments. If the final price is lower than the provisional price, the rectification of the tax amounts must be carried out by regularizing the situation in the tax return, rather than through the refund of undue payments.

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