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V2662-18 2 October 2018 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · base imponible

Lease tax base calculated over a minimum three-year period

A taxpayer inquired whether the tax base for a one-year contract should be calculated based on that specific term or the three-year minimum stipulated by the Urban Leasing Act (LAU). The Directorate General for Taxes (DGT) ruled that the three-year period must be used due to mandatory extensions.

The question raised

First question raised. Whether, for the purposes of the tax base of the Transfer Tax and Documented Legal Acts Tax due to the establishment of the lease, the period stated in the contract or the 3 years regulated in Article 9.1 of the Urban Leasing Act must be taken into account.

The DGT's ruling

The tax base is determined according to the duration period of the contract, but in urban property leases subject to mandatory extension, a minimum of three years must be computed. Even if the lessee subsequently waives the extensions, the refund of the tax is not applicable if the effective duration is less than said period. A refund would only be possible if the termination of the contract is declared judicially or administratively by a final resolution.

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