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V1082-14 14 April 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · base fija

Italy could tax a resident consultant's fees earned working from Italy's client offices if such use constitutes a fixed base

A consultant resident in Spain asks whether Italy can tax his professional fees when working from his Italian client's offices. The DGT states that if the use of such offices constitutes a fixed base, Italy may tax income attributable to that base.

The question raised

Whether Italy may tax the professional fees that will be invoiced to the Italian client company.

The DGT's ruling

According to the Convention between Spain and Italy, income from professional services is taxable only in Spain, unless the professional has a fixed base in Italy. The use of the client company's offices to provide services on a recurring basis could give rise to the existence of a fixed base. In that case, Italy may tax the income to the extent that it is attributable to said fixed base. To avoid double taxation, Spain shall grant a deduction for the tax paid in Italy.

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