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V1678-14 1 July 2014 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

US production company income from organising a concert is not taxable in Spain under certain conditions

A US company sought clarification on whether payments received for producing a concert in Spain should be taxed locally. The DGT ruled that, as these constitute technical production services rather than the personal activities of the artists, the artist clause of the Convention does not apply, and the income is only taxable in the US.

The question raised

Taxation in Spain of the payments made by the Spanish promoter to the consulting entity as a consequence of the organization of the musical event in Spain.

The DGT's ruling

The income of a production company that has no relationship with the artists and performs technical tasks (assembly, transport, administration) is not considered artists' income according to the Convention with the USA and the OECD Model Comments. As these are not support or personal activities of the artist, this income cannot be subject to taxation in Spain, unless the company has a permanent establishment.

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