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V3249-20 30 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · intermediación

Rental brokerage services performed on behalf of third parties are subject to 21% VAT

An apartment management company has requested guidance on how to proceed when property owners refuse to issue invoices including VAT and income tax (IRPF) withholdings. The Directorate General of Taxes (DGT) clarifies that brokerage services performed on behalf of third parties are subject to VAT and that the management company is not required to apply IRPF withholdings.

The question raised

How should the consulting entity proceed in these cases?

The DGT's ruling

If the management company acts as an intermediary on behalf and for the account of the owners, its mediation services are subject to VAT at the general rate of 21%. The management company must issue an invoice for its mediation activity to the owners. It is not appropriate to apply a withholding tax on income tax (IRPF) for the lease of urban real estate, as the management company is not the lessor and does not pay a rent subject to IRPF.

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