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V4945-16 15 November 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · atribución de rentas

Pharmacy returns are subject to Personal Income Tax and community of property entities must apply the VAT equivalence surcharge

A query was raised regarding whether pharmacies can be taxed under Corporate Tax and whether community of property entities must apply the VAT equivalence surcharge regime. The DGT ruled that pharmacy activity is attributed to the individual owner and that community of property entities are VAT-registered traders obliged to apply the equivalence surcharge on non-processed products.

The question raised

Possible application to said pharmacies of Article 7, paragraph 1, letter a) of the Corporate Tax Law, as well as their subjection to the general regime of Value Added Tax.

The DGT's ruling

The activity of pharmacy offices legally corresponds to the pharmacist owner-holder, therefore the income is taxed under Personal Income Tax (individually or through income attribution) and not under Corporate Tax. Asset communities carrying out this activity have the status of entrepreneur for VAT purposes. Likewise, they must apply the special regime of the equivalence surcharge in the marketing of products acquired from third parties that are sold in the same state in which they were acquired, as the preparation of magistral formulas is not considered a transformation.

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