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V2174-20 29 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · asesoramiento financiero

Financial advisory services are subject to VAT and classified as income from economic activities for Income Tax purposes

A self-employed professional inquired whether their advisory services regarding the purchase and sale of financial products for a company are exempt from VAT and how they are taxed for Income Tax purposes. The Directorate General for Taxes (DGT) ruled that such advisory services are subject to VAT and that the income must be classified as income from economic activities.

The question raised

Taxation under VAT and Personal Income Tax (IRPF).

The DGT's ruling

Financial advisory services, consisting of proposing and monitoring an investment strategy, are not exempt from VAT as they do not constitute deposit or securities management operations. For Personal Income Tax (IRPF) purposes, the income received, including both the fixed amount and the profit sharing, is considered income from economic activities as it involves the self-organization of means of production or human resources.

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