Skip to content
Back to index
V3316-14 12 December 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · arrendamiento de locales

Leasing of commercial premises is subject to VAT and IRPF withholding depending on the tenant

A query was raised regarding whether the rental of two premises (one to a religious association and another to an individual for storage) is subject to VAT and whether IRPF withholding is required. The DGT determines that both rentals are subject to VAT and that IRPF withholding depends on the status of the tenant.

The question raised

Liability for Value Added Tax and subjection to withholding under Personal Income Tax.

The DGT's ruling

The leasing of commercial premises is subject to VAT, which renders the owner an entrepreneur or professional. The VAT exemption applies only to residential dwellings; therefore, the owner must charge the tax in both cases. Regarding Personal Income Tax (IRPF), the yields are subject to withholding provided that the lessee is a withholding agent, such as a religious association. If the lessee is an individual without economic activity, there is no obligation to apply withholding.

Book your free first meeting