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V1722-21 3 June 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · exención

Translation services may be exempt from VAT if they involve a personal and original contribution

An individual working as an employee inquires about the taxation of an audio transcription project for an American company. The DGT analyzes the VAT, IAE, and IRPF liability of said activity.

The question raised

Question posed: Taxation of the provision of such services in Value Added Tax, Economic Activities Tax, and Personal Income Tax.

The DGT's ruling

Regarding VAT, translation services performed by an individual are exempt if they constitute a personal contribution distinct from the pre-existing work, but are taxed at the general rate if they consist of mere translation of texts such as brochures or manuals. If the service is occasional and without intention of continuity, it is not subject to VAT. Regarding IAE, the activity is professional and the individual is exempt from the tax. Regarding IRPF, the income is considered earnings from professional activities.

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