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V5293-16 14 December 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · arrendamiento de negocio

No Corporation Tax withholding applies if business leasing constitutes an economic activity for the company

The applicant asks whether leasing a catering business (including the premises and necessary equipment) is subject to Corporation Tax withholding. The DGT indicates that no withholding will apply if two requirements are met: it must be a lease of a business rather than just premises, and said activity must constitute an economic activity for the lessor.

The question raised

Whether, in the case of leasing a business to a third party, together with the set of elements necessary to expressly carry out the restaurant activity, the amounts received as business lease would be subject to withholding in Corporate Income Tax.

The DGT's ruling

In order for withholding not to apply, the lease must be a business lease, understood as a patrimonial unit with its own existence and in operation. Furthermore, the leasing activity must constitute an economic activity for the company, which requires its own organizational structure with adequate human resources and material means. Compliance with these factual requirements must be proven before the Administration.

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