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V1454-14 30 May 2014 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

Non-resident actors and technicians not subject to Spanish tax if OECD convention applies and no permanent establishment

An audiovisual content company asks whether it must withhold taxes from non-resident actors, models and technicians participating in an advertisement. The DGT assesses whether these activities qualify as artists or professional services under conventions or internal regulations.

The question raised

Whether the aforementioned persons can be considered artists and, if applicable, the withholdings due on the income derived from the services provided, to be applied by the consultant (payer of the services).

The DGT's ruling

If an applicable Convention exists, income from commercial filming does not qualify as artists' income (Art. 17 OECD) nor as royalties (Art. 12 OECD), but as business profits (Art. 7 OECD); therefore, it is not taxed in Spain if there is no permanent establishment. In that case, there is no withholding tax, but there is an obligation to file a negative tax return. If no Convention exists, the income is considered to be obtained in Spain as it is performed here, being taxed under the general regime or as employment income at a rate of 24.75%.

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