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V1584-14 18 June 2014 · SG de Tributos Locales Criterion in force
OTRO · impuesto sobre actividades económicas

Franchise activities must be classified according to their components for IAE purposes

A company providing brand licensing, know-how, and premises to third parties has requested guidance on how to tax these activities under the IAE. The DGT has determined that franchising does not have its own specific heading and must be broken down according to the activities performed, such as the leasing of assets or the provision of services.

The question raised

Tax obligations of the consulting company and of the collaborators, for the purposes of the Tax on Economic Activities.

The DGT's ruling

As there is no specific classification for franchising, it must be classified according to its material nature. The transfer of brand and know-how is treated independently from the provision of services or the leasing of premises and machinery. Likewise, the supply of products and the rental of accounting equipment require registration under different headings. The collaborator operating the premises must register under the heading for the retail trade of food.

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