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V1014-22 5 May 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · derechos de autor

Literary creation services are subject to but exempt from VAT and treated as employment income for Income Tax purposes

A pensioner has enquired about the taxation of royalties from the publication of a novel. The Directorate General for Tax (DGT) has determined that while the activity is subject to the Economic Activities Tax (IAE), it is exempt for individuals; furthermore, creation services are exempt from VAT and the resulting income is classified as employment income for Income Tax (IRPF) purposes.

The question raised

Taxation under IAE, VAT, and IRPF of copyrights.

The DGT's ruling

Under the IAE, the activity of a writer is taxable, but natural persons are exempt from taxation and from registration in the registry. For VAT, the creation of original literary texts is taxable but exempt, requiring the issuance of an invoice if the recipient is an entrepreneur or professional. For IRPF, income from the assignment of exploitation rights is classified as income from employment, unless it involves the organization of means of production.

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