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V3123-20 20 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos de actividades económicas

Private tutoring for civil service exams is taxable as economic activity under Personal Income Tax

A group of workers intends to provide private tutoring for civil service exam preparation outside of their working hours. The Directorate-General for Taxes (DGT) has determined that these activities are subject to the Business Activity Tax (IAE) (though exempt from payment), VAT (with exemptions available if requirements are met), and Personal Income Tax (IRPF) as income from economic activities.

The question raised

Tax treatment of said activity in the Tax on Economic Activities, Value Added Tax, and Personal Income Tax.

The DGT's ruling

In Personal Income Tax, the provision of courses is classified as an economic activity if there is self-organized management of means of production or human resources. In this case, as it is carried out on a self-employed basis to intervene in the market, the income must be taxed as economic activities. Regarding VAT, private lessons provided by natural persons on subjects within study plans are exempt if they do not require registration in the business or artistic activity schedules of the IAE. In the IAE, the activity is subject to taxation, but the members are exempt from payment as they are natural persons.

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