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V2373-16 31 May 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retención

No tax withholding required on payments to consumers in advertising campaigns

An advertising management company has enquired whether it must withhold tax when paying money to clients as reimbursement for expenses incurred during campaigns. The DGT has ruled that if the payment is made strictly within the private sphere of consumers, no withholding is required.

The question raised

Subjecting the amounts delivered to withholding.

The DGT's ruling

Pursuant to Article 75 of the Personal Income Tax Regulations, income subject to withholding is limited to income from employment, movable capital, certain economic activities, specific capital gains, leases, intellectual property, or gaming prizes. To the extent that the amounts delivered are made within the strictly private sphere of consumers, no withholding shall be applied to them.

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