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V1332-14 19 May 2014 · SG de Fiscalidad Internacional Criterion in force
IRNR · retención en la fuente

Taxation of artists' and production service income: DGTC guidelines

A Spanish company asks whether it must withhold IRNR on contracts with representation agencies and technical production companies for a festival. The DGTC responds that payments to agencies for an artist's performance are taxable in Spain, but technical production services are not, unless there is no proportionality in amounts or the income is attributable to the artist.

The question raised

Regarding the contract with representation agencies, should withholding be applied in Spain for Non-Resident Income Tax, in accordance with the applicable Double Taxation Convention, on the grounds that they are considered artist services?

The DGT's ruling

According to the OECD Model Tax Convention and the TRLIRNR, income from the personal activity of artists may be subject to taxation in Spain, even if attributed to another person. Payments to representation agencies for the artist's performance are subject to withholding. However, technical production services (sound, lighting, transport) are not considered artist activities and are not taxed in Spain, unless there is a lack of proportionality between these payments and the performance income or if they are income derived from the artist's activity.

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