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V1603-24 1 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · actividad económica

Sale of own artworks subject to 10% reduced VAT rate and Income Tax as an economic activity

A pensioner and artist inquired whether selling her paintings from her own premises entails VAT and Income Tax obligations. The DGT ruled that the activity is subject to VAT at a 10% rate and that the income must be taxed under Income Tax as earnings from an economic activity.

The question raised

Taxation in VAT and Personal Income Tax (installment payments).

The DGT's ruling

The sale of original works of art by their author constitutes a business or professional activity subject to VAT, with the application of the reduced rate of 10%. For Personal Income Tax purposes, the income is classified as income from economic activity, which must be included in the annual tax return under the direct estimation method. Furthermore, the exercise of the activity entails the obligation to submit quarterly installment tax returns.

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