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V2820-17 2 November 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · cesión de créditos

Assignment of credit rights by a professional is VAT exempt and not subject to IRPF withholding

A self-employed professional assigns the right to collect outstanding fees to a third party for an amount lower than the original value. The DGT has determined that this transaction is exempt from VAT and that the amount received is not subject to IRPF withholding.

The question raised

Subjectivity to VAT and to withholding tax on account of Personal Income Tax regarding the assignment.

The DGT's ruling

The transfer of credits that form part of professional assets is a service provision subject to VAT, but it is exempt pursuant to Article 20.One.18.e) of Law 37/1992. Regarding Personal Income Tax (IRPF), the assignment generates a capital gain or loss based on the difference between the transfer value and the acquisition value. No withholding tax is applicable to the amount of the assignment, as it is not one of the types of income subject to withholding under the Personal Income Tax Regulations.

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