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V1815-20 8 June 2020 · SG de Tributos Locales Criterion in force
OTRO · impuesto sobre actividades económicas

Deregistration from IAE is not mandatory when receiving the extraordinary benefit for reduction in turnover

A self-employed individual inquired whether they must deregister from the Business Activity Tax (IAE) upon receiving the extraordinary benefit for a reduction in turnover exceeding 75%. The Directorate-General for Tax Affairs (DGT) ruled that receiving this benefit does not imply the cessation of economic activity.

The question raised

It is desired to know whether it is mandatory to deregister from self-employment due to receiving this benefit.

The DGT's ruling

The taxable event for the IAE occurs by the mere exercise of an economic activity, regardless of whether profit is made. The receipt of the extraordinary benefit for reduction in turnover does not, in itself, constitute an effective cessation in the exercise of the activity. Only the actual cessation of the activity determines the obligation to file a declaration of deregistration from the tax or the census.

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