Skip to content
Back to index
V2938-14 31 October 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ingreso a cuenta

Withholding tax must be applied to professional fees paid via property adjudication

A professional received a property in lieu of professional fees following a judicial process. The query asks whether the entity must apply withholding tax on the total invoice amount when paying the remaining debt.

The question raised

Whether the application of the indicated withholding is appropriate.

The DGT's ruling

The judicial adjudication of an asset to satisfy professional fees constitutes payment in kind, which requires making a withholding tax payment. The payer must perform said withholding on the full amount to be satisfied pursuant to the judicial resolution. The withholdings or payments on account must be attributed to the tax period in which the income is imputed.

Book your free first meeting