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V1419-18 29 May 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · representante de comercio

Trade representatives using their own resources may classify income as economic activity

A query was raised regarding whether the income of a trade representative should be classified as employment income or income from economic activities. The DGT ruled that, as they organise their own resources and incur expenses to obtain commissions, it constitutes income from professional economic activity.

The question raised

Question posed: Classification of income and deductibility of expenses.

The DGT's ruling

Commercial representatives generally receive income from employment; however, if they organize their own means of production or human resources to intervene in the distribution of goods or services, such income shall be classified as income from economic activities. In this case, as they obtain income exclusively through commissions and assume their own expenses, the activity is considered professional. The deductibility of expenses requires that they be linked to the activity, their occurrence during the tax year be proven, they have correct temporal imputation, and they are recorded and justified.

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