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V1112-20 28 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · subarrendamiento

The natural person who subleases a dwelling for office use should not apply withholding tax under Personal Income Tax (IRPF)

An individual leases a property to sublet it to a company for use as an office. The DGT determines that there is no obligation to withhold Income Tax (IRPF) and that the sublease is subject to VAT at 21%.

The question raised

1) Whether the income satisfied by the lease is subject to withholding tax under Personal Income Tax (IRPF).

The DGT's ruling

The individual lessee must not perform IRPF withholding as they are not a taxpayer carrying out economic activities. The sublease income is considered income from movable capital, unless it involves the organization of means of production. The sublease is subject to and not exempt from VAT at 21% because the property is intended for office use by a commercial entity.

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