Professionals with subcontracted manufacturing must pay tax under two IAE headings

The correct determination of headings in the Business Activities Tax (IAE) is a critical step when starting an economic activity. A recent resolution from the Directorate General of Taxes (DGT) addresses the complexity of hybrid business models that combine the provision of professional services with the commercialization of products manufactured by third parties.

What the DGT has resolved

The inquiry analyzes the situation of a professional who carries out three different types of activities and seeks their placement within the IAE Tariffs:

• Project management: When this work is performed personally and lacks a structured business organization, it must be classified as a professional activity within the second section, specifically under heading 899.
• Sales via print-on-demand: In cases where product manufacturing is subcontracted for subsequent sale, the regulations require a double classification in the first section. The taxpayer must register both in the manufacturing heading (474.1) and the retail trade heading (651.2).

The resolution is based on the IAE Instruction and the Recast Text of the Law on the Legal Regime of Local Treasuries.

What it means for you

If your business model involves managing projects independently and, additionally, commercializing products that you do not manufacture directly, but instead order to be produced on demand, a single registration is not enough. The administration requires you to reflect both the nature of the subcontracted production and the final sales activity.

This criterion ensures that the economic activity is correctly mapped according to its operational reality. Although in this specific case the inquirer was exempt from payment due to their status as a natural person, the obligation to register and the correct classification in the corresponding headings remain in effect for tax control purposes.

What you should do

It is necessary to analyze the structure of your income and the operation of your services to avoid errors when registering activities. An incorrect classification in the IAE can lead to inconsistencies with other tax obligations or an inadequate description of your profile before the Administration. It is recommended to assess the nature of each income stream to determine whether they require a professional or commercial classification.