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V1746-20 3 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · estimación objetiva

Lottery activities may require direct estimation taxation for both lotteries and books

A books and newspapers retailer who also sells lotteries seeks clarification on how to be taxed for VAT and IRPF if lottery income exceeds book income. The DGT rules that if the lottery activity ceases to be ancillary for IRPF purposes, both activities must be taxed under the direct estimation method.

The question raised

1st VAT taxation.

The DGT's ruling

In Personal Income Tax (IRPF), if income from lottery activities exceeds 40% of the income from the main book activity, the latter is not considered ancillary. As it is not ancillary and is not included in the objective estimation method, the lottery activity must be taxed under the direct estimation method. Due to the incompatibility of methods, the book trade activity must also be taxed under the direct estimation method. For VAT, the book activity may remain under the equivalence surcharge as a differentiated sector, provided it meets the requirements of a retail merchant.

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