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V0793-22 11 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
OTRO · impuesto sobre actividades económicas

Sale of a horse following training is classified as livestock farming rather than livestock trading

An animal trainer has enquired whether purchasing a horse for training and subsequent resale years later should be taxed as livestock trading. The Directorate General for Taxes (DGT) has ruled that the activity constitutes livestock farming, and its treatment under Personal Income Tax (IRPF) will depend on whether the requirements for an economic activity are met.

The question raised

Taxation in IAE and IRPF regarding the purchase and sale of a horse.

The DGT's ruling

The purchase and sale of a horse for training and subsequent sale constitutes an economic activity subject to the IAE, classified under group 061 (equine, mule, and donkey livestock farming) and not under the heading for the purchase and sale of livestock. For IRPF purposes, income shall be considered from economic activities only if the organization on one's own account of means of production or human resources is proven. Otherwise, the sale shall determine a capital gain or loss.

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