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V1461-20 19 May 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retención

No income tax withholding required for mixed office rental and service contracts

A query was raised regarding whether income tax (IRPF) withholding should be applied when paying for office space in a coworking facility that includes additional services. The Directorate General for Taxes (DGT) ruled that, as it is a mixed contract comprising both leasing and services, it is not subject to withholding.

The question raised

Whether withholding tax on behalf of Personal Income Tax (IRPF) must be applied to the income paid.

The DGT's ruling

The leasing of offices or workspaces that includes cleaning, secretarial, communications, or electricity services is configured as a mixed contract. As its purpose is to provide the lessee with the necessary infrastructure for their activity, this case falls outside the scope of Article 75.2,a) of the Tax Regulation. Therefore, the income paid shall not be subject to withholding.

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