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V2164-14 5 August 2014 · SG de Fiscalidad Internacional Criterion in force
IRNR · ganancia patrimonial

Purchase of football player federal rights not subject to retention by buyer

A football club asks whether it must withhold taxes when paying a Monaco entity for the purchase of a player's federal rights. The DGT determines that the payment constitutes a capital gain and that the club has no obligation to withhold tax.

The question raised

Whether, in accordance with Non-Resident Income Tax regulations, the transferring entity could obtain a capital gain in Spanish territory that must be subject to withholding by the consulting entity.

The DGT's ruling

The payment for the acquisition of a football player's federative rights is classified as a capital gain, as it constitutes the purchase of an intangible asset. This income is subject to Non-Resident Income Tax because the rights are exercised within Spanish territory. However, the purchasing club is not required to withhold tax on these payments under current regulations. Furthermore, the payer shall not be jointly and severally liable for the collection of the tax debt, as it constitutes a capital gain and not income from activities.

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