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V1008-20 22 April 2020 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

Bar-cafetería activity in Lanzarote deemed permanent establishment

A German lawyer asks whether his seasonal bar-cafeteria activity in Lanzarote, held for only two or three months a year, constitutes a permanent establishment. The DGT responds that a permanent establishment exists due to the recurrent nature of the activity and its conduct in a fixed location.

The question raised

The existence of a permanent establishment.

The DGT's ruling

A permanent establishment exists when the activity at the place of business is not merely temporary. Even if the period is less than six months, a permanent establishment may exist if the activity is recurrent over several years and is always carried out in the same premises. In this case, the bar-cafeteria activity carried out by the taxpayer in Spain shall be taxed in accordance with the permanent establishment rules of the TRLIRNR.

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