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V2872-20 23 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Artistic and literary prizes taxed as employment income or economic activities depending on their nature

A local council has requested clarification on whether it must withhold Personal Income Tax (IRPF) for artistic and cultural competition prizes. The Directorate General for Taxes (DGT) has ruled that if the transfer of exploitation rights is involved, these prizes are classified as either employment income or economic activities, requiring the application of the corresponding withholdings.

The question raised

Subject to IRPF withholding tax on prizes.

The DGT's ruling

If the prizes involve the assignment of exploitation rights of works, they are classified as income from employment. If the participation is carried out in the exercise of an economic activity, they are considered income from professional activities. The applicable withholding tax shall be that established in Articles 80 and 95 of the IRPF Regulations according to the classification obtained.

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