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V2705-23 5 October 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · exención de servicios

Translation services: VAT exemption or liability depends on recipient and nature of work

A translator seeks clarification regarding VAT taxation on services provided to an international organisation and whether IRPF withholding tax applies. The Directorate-General for Taxes (DGT) rules that VAT exemption depends on whether the translation constitutes a personal contribution and the status of the client. Furthermore, there is no obligation for IRPF withholding as the payer is not a liable person.

The question raised

1st Taxation of VAT on the services provided.

The DGT's ruling

Translation services are exempt from VAT if the translator is a natural person and the work constitutes a personal contribution distinct from pre-existing works. If the recipient is an international organization, the services may also be exempt pursuant to Article 22.9 of the VAT Law. If the service is not exempt, the general rate of 21% shall apply. Regarding Personal Income Tax (IRPF), there is no obligation to withhold tax if the payer is an international organization without a permanent establishment in Spain.

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