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Compensation for Goodwill: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 14 rulings · 2015–2026

Current position

Compensation for goodwill arising from the termination of an agency contract is income from economic activity subject to IRPF (Personal Income Tax). The 30 percent reduction provided for in Article 32.1 of the IRPF Law does not apply. This is because it does not constitute a cessation of activity nor compensation in substitution for economic rights of indefinite duration.

The DGT's position remains constant in the distinction between compensation for goodwill (subject to IVA [VAT] and IRPF) and compensation for damages (exempt from IVA). In the scope of IRPF, the doctrine has repeatedly confirmed the impropriety of the reduction for irregular income. No change is observed in the interpretation of the nature of these amounts.

Turning points

  1. V0690-18

    Establishes that the compensation does not allow for the 30 percent reduction of Article 32.1 of the IRPF Law as it does not stem from the cessation of activity but from the contractual termination.

  2. V0110-20

    Reinforces that the amount is not notoriously irregular income nor does it have a generation period exceeding two years, strictly linking it to the contractual termination.

Analysis based on 14 of 14 rulings with a stated position. Updated 26 September 2026.

Rulings on this topic

14
V3085-19 4 Nov 2019

Goodwill compensation for commercial agents is subject to VAT and Income Tax

SG de Impuestos sobre la Renta de las Personas Físicas
indemnización por clientelacontrato de agenciarendimientos de actividades profesionalesautoliquidación complementariaobligación solidaria LIVA — Ley 37/1992 del IVA art. 75.Uno.2ºLIVA — Ley 37/1992 del IVA art. 78
Affects CompanyExpat · Non-residentIndividual
V0640-17 14 Mar 2017

Compensation for client base is subject to VAT, whereas damages are not

SG de Impuestos sobre la Renta de las Personas Físicas
indemnización por clientelaindemnización por daños y perjuicioscontraprestaciónrendimientos de actividades profesionalesretención LIVA — Ley 37/1992 del IVA art. 4.1LIVA — Ley 37/1992 del IVA art. 5.1
Affects CompanyExpat · Non-residentIndividual

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