Mixed service and real estate contracts and IRPF withholding

The nature of contracts that combine the use of real estate with the provision of additional services is a point of special attention for the correct application of withholdings in Personal Income Tax (IRPF). The Dirección General de Tributos (DGT) has clarified the distinction between the leasing of spaces and service contracts with infrastructure.

What the DGT has resolved

The ruling analyzes whether income derived from activities that combine the leasing of rooms with the pass-through of expenses is subject to withholding. The criteria establish that, if the contract consists of the leasing of a room with the pass-through of expenses, the lessee is obliged to apply the withholding as long as they are a professional in the exercise of their activity.

However, the DGT points out a relevant exception: when it involves a mixed contract of leasing and service provision intended to provide infrastructure to the lessee, the income falls outside the scope of withholding of the IRPF Regulations. For this criterion to be applicable, the purpose of the contract must transcend the simple leasing of real estate.

What it means for you

This criterion has a direct impact on two profiles:

• Companies and entities: Those that lease rooms and pass through expenses must apply the withholding, unless they can prove that the contract is for services and not pure leasing.
• Professionals: Professionals, such as healthcare workers who lease spaces for their activity, must verify the nature of their contract. If the contract is pure leasing, there is an obligation to withhold.

What should be done

It is fundamental to analyze the structure of contracts that involve both the use of a physical space and the obtaining of additional services. The key lies in the purpose of the agreement: if the main objective is the provision of infrastructure through services, the tax classification will be different from that of a conventional lease. It is recommended to evaluate the contractual documentation to ensure that the nature of the provision matches the applied tax treatment.