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V5016-16 18 November 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · know-how

Language teaching methods cannot be classified as know-how for Corporation Tax reduction

A language teaching company sought clarification on whether its management model and teaching method constituted know-how. The DGT has ruled that, as the method is disclosed through the teaching process itself, it fails to meet the requirement of being non-disclosed information necessary for this concept.

The question raised

1) Whether the set of business information constituting the teaching method of the consulting entity and its administrative and commercial management model of the business is considered know-how.

The DGT's ruling

Know-how requires the communication of specific knowledge and experience not disclosed to the public. In this case, as it concerns a teaching method transmitted through the activity itself, the content is disclosed to the public. Therefore, it cannot be classified as know-how and is excluded from the reduction provided for in Article 23 of the LIS.

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