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V3102-17 29 November 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · contrato de agencia

Amounts from agency contract termination classified as professional activity income

A query was made regarding the tax classification of €55,000 received following the termination of an agency contract. The DGT has determined that these amounts constitute income from professional activities. Furthermore, if the failure to withhold tax is the fault of the payer, the recipient may deduct the amount that should have been withheld.

The question raised

Question raised: Application of Article 99.5 of Law 35/2006.

The DGT's ruling

The amount received for the termination of an agency contract, which may include compensation for clientele, lack of notice, and commissions, qualifies as income from professional activities. As income from professional activities, it is subject to withholding tax according to the Personal Income Tax Regulations. If the withholding is not applied or is lower due to reasons exclusively attributable to the withholding agent, the recipient may deduct from their tax liability the amount that should have been withheld.

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