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V1810-14 9 July 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Retirement tax reduction cannot be applied to taxi licence transfers if the activity continues

A retired taxi driver inquired whether selling his auto-taxi licence allows for the application of the capital gains tax reduction for retirement. The DGT ruled that, as the individual continues to carry out the activity after retiring, the transfer is motivated by the cessation of activity rather than retirement, thereby preventing the application of said reduction.

The question raised

Whether, when transferring the auto-taxi license, one could benefit from the reduction of the capital gain provided for in Article 42 of the Personal Income Tax Regulations.

The DGT's ruling

The transfer of a taxi license generates a capital gain or loss that must be calculated as the difference between the transfer value and the book value. To apply the reduction provided in Article 42.1 of the Personal Income Tax (IRPF) Regulations, the transfer of intangible assets must be motivated by retirement, permanent disability, or cessation due to restructuring, or transferred to relatives up to the second degree. If the holder continues to carry out the activity after retiring, the transfer is not considered motivated by retirement, but rather by the cessation of activity, leaving the gain subject to IRPF without the aforementioned reduction.

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