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V1500-22 22 June 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · operador de gestión independiente

Only the management fee should be included in turnover and taxable base

An independent rights management entity asks whether the full amount collected or just its commission should be recorded as income. The DGT states that, when acting on behalf of another, only the management fee should be recognised as income.

The question raised

Whether the amount that must appear as INCN for tax purposes (Corporate Income Tax and other taxes) must include the totality of the income obtained by the company; that is, both the total income from collection from users (to subsequently offset with an equivalent expense its subsequent payment to the copyright holders), as well as the income in respect of the management fee, or conversely, whether it should only register as taxable income the concept corresponding to the accrued management fee, being this, ultimately, the real taxable income corresponding to its habitual operation or Core Business, for the purposes of the correct quantification of the Corporate Income Tax taxable base of the entity, as well as the adequate fulfillment of other tax obligations whose accrual, quantification, or enforceability is related to said INCN.

The DGT's ruling

As it does not control the copyrights and acts as an agent, the company acts on behalf of others. Therefore, it should only recognize the management fee received as income. If this service is its ordinary activity, said amount shall form part of its turnover for Corporate Income Tax and the Business Activities Tax.

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