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V0837-22 19 April 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reducción de rentas

Article 23 LIS reduction cannot be applied to income from know-how transfers

A company enquired whether income derived from the transfer of its know-how (technical, industrial, and commercial knowledge) could benefit from the reduction in taxable base provided for in Article 23 of the Corporate Income Tax Act (LIS). The Directorate General for Taxes (DGT) has ruled that this type of asset is not included in the list of intangibles eligible for such a reduction.

The question raised

Whether the income obtained from the transfer to third parties of the Know-How regulated by the indicated contract would be subject to the reduction provided for in Article 23 of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

The reduction provided for in Article 23 of the LIS applies only to the transfer of specific intangible assets, such as patents, utility models, protected designs and models, or registered advanced software. Know-how, consisting of technical, industrial, and commercial knowledge, does not form part of the assets listed in said provision. Therefore, the transfer of know-how cannot benefit from the aforementioned tax incentive.

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