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V2509-24 10 December 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · retención

Withholding tax on leases cannot be avoided if the resulting IAE levy is zero

A query was raised regarding whether two companies owning a property could be exempt from lease withholding tax. The DGT ruled that they do not meet the economic activity requirement if the IAE levy applied to their share of the cadastral value is zero.

The question raised

It is desired to determine whether Companies A and B meet the requirements to request the exemption from withholdings arising from leasing for the lessors.

The DGT's ruling

In order for there to be no obligation to withhold tax on urban real estate leases, the lessor's activity must fall under the headings of group 861 and the amount resulting from applying the rules of said group to the cadastral value must not be zero. In this case, as the cadastral value assigned to each company is less than 601,012.10 €, the IAE tax liability is zero, therefore the requirement for exemption is not met.

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