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V2777-20 10 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · entrega de bienes

Advertising services taxed at 21% VAT; artworks at 10% if qualifying

A professional engaged in advertising and plastic arts seeks clarification on applicable VAT rates and treatment in personal income tax. The tax authority confirms that advertising services are subject to 21% VAT, while artworks are taxed at 10% if they are artistic objects, and advertising services are considered income from economic activities subject to retention.

The question raised

1.) The Value Added Tax rate that must be charged for the services provided in each of the consulted activities.

The DGT's ruling

Advertising and marketing services are subject to the general VAT rate of 21%. Deliveries of works of art made by their author are taxed at the reduced rate of 10% if they meet the definition set forth in Article 136 of the VAT Act. Professional services provided by visual artists regarding original creations may be exempt if they consist of copyrights. For Personal Income Tax (IRPF), income is considered returns from economic activities and is subject to withholding, at a rate of 15% or 7% for new professionals.

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