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V1761-22 22 July 2022 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · documentos mercantiles

Endorsing a cheque with a 'not to order' clause may be subject to ITPAJD

The inquirer asks whether endorsing cheques for collection that contain a 'not to order' clause is subject to Transfer Tax and Documented Legal Acts Tax (ITPAJD). The DGT indicates that if an endorsement is made, the document is transformed into an 'to order' instrument and becomes subject to the tax.

The question raised

Whether the issuance, the "for collection" endorsement and/or the collection of said "not to order" checks, whose drawee is said bank, is subject without being exempt and, therefore, taxed by the Transfer Tax and Documented Legal Acts under the modality of Documented Legal Acts. Commercial Documents.

The DGT's ruling

Checks that function as a transfer or are subject to endorsement are subject to the ITPAJD under the modality of documented legal acts. If a check with a "not to order" clause is endorsed, even with limited effects, it is transformed into an order document and the first endorser shall be the taxable person. Notwithstanding, according to the Negotiable Instruments and Check Law, checks with a "not to order" clause are not transferable by endorsement, but rather through ordinary assignment.

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