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V0834-20 13 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Income from employment is classified as employment income, while service provision is classified as business income

The taxpayer seeks clarification on how to classify income earned as an employee versus income earned through service provision and leasing of services for Personal Income Tax (IRPF) purposes. The Directorate General for Taxes (DGT) rules that income from an employment relationship constitutes employment income, whereas income derived from the provision of professional services constitutes income from economic activities.

The question raised

Classification in Personal Income Tax (IRPF) of the income obtained.

The DGT's ruling

Income derived from an employment relationship is classified as employment income pursuant to Article 17.1 of Law 35/2006. Conversely, income obtained through commercial relationships for the provision of professional services is classified as income from economic activities in accordance with Article 27.1 of the same law.

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