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V2492-17 4 October 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · royalties

Transfer of a utility model for royalties may be subject to VAT and Income Tax as professional activity or investment income

The taxpayer inquires about the taxation under IAE, VAT, and Income Tax regarding the transfer of exploitation rights for a utility model in exchange for royalties. The DGT indicates that the activity is subject to VAT and that, for Income Tax purposes, the classification depends on whether the taxpayer is the author or merely the owner.

The question raised

Taxation in terms of IAE, VAT, and Personal Income Tax.

The DGT's ruling

The assignment of exploitation rights for a utility model is subject to VAT if carried out by an entrepreneur or professional. For Personal Income Tax purposes, if the model is authored by the taxpayer, the income is derived from professional activities. If the model was acquired from a third party, the income is considered movable capital income.

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