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V1946-17 19 July 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos de actividades profesionales

Classification of income from the assignment of intellectual property rights as professional activities

The taxpayer transferred intellectual property rights to a US entity and sought guidance on the classification and timing of the income. The Directorate General for Taxes (DGT) ruled that, by assigning exploitation rights, the income is classified as professional activity income and is subject to the accrual rules of Corporate Tax.

The question raised

Question raised: Classification, for the purposes of Personal Income Tax, of the income derived from the aforementioned agreement and whether it constitutes general income or savings income.

The DGT's ruling

If the author grants exploitation rights to a third party, the income is classified as professional activities (general income). For temporal imputation, the criteria of the Corporate Tax Act are applied, allowing for imputation based on collections in installment operations. Under the Spain-USA Convention, these payments are considered royalties if the price is determined according to productivity. The tax paid in the USA may be deducted in Spain according to the Personal Income Tax regulations.

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