Doctrine by topic · DGT Observatory

Professional Income: 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

Doctrinal reversal High confidence 26 rulings · 2014–2026

Current position

Income obtained from services provided without labor dependency or alienation is classified as income from professional economic activities. In the case of teaching, the classification depends on whether the activity is direct and personal (professional) or carried out through an organization (business). Regarding court costs awards, the payment constitutes a capital gain for the prevailing party and not professional income for the lawyer; therefore, there is no obligation to withhold tax for the party ordered to pay.

The DGT's position shows a divergent evolution depending on the scenario. Regarding court costs awards, there has been a clear reversal: from considering that the payment could be professional income or a generic capital gain, it has been specified that it is compensation that does not entail withholding for the debtor. Regarding the classification of activities, the DGT maintains differentiated criteria between professional and business activities based on the organization of resources.

Turning points

  1. V1545-19

    Establishes that the payment of court costs is compensation and not professional income, being integrated as a capital gain.

  2. V1373-20

    Specifies that the party ordered to pay is not satisfying professional income to the lawyer, eliminating the obligation to perform IRPF (Personal Income Tax) withholding by the debtor.

Analysis based on 25 of 26 rulings with a stated position. Updated 24 September 2026.

Rulings on this topic

24
V3084-23 24 Nov 2023

Professional income is recognised on an accrual basis or via the cash basis

SG de Impuestos sobre la Renta de las Personas Físicas
imputación temporaldevengocriterio de cobros y pagosactividades económicassuplidos LIRPF — Ley 35/2006 del IRPF art. 14.1.bLIS — Ley 27/2014 del Impuesto sobre Sociedades art. 11.1
Affects CompanyExpat · Non-residentIndividual
V2633-22 27 Dec 2022

Illustration classes may be exempt from VAT if conditions are met

SG de Impuestos sobre la Renta de las Personas Físicas
exención de ivaactividades profesionalesretención irlfplanes de estudioclases particulares LIVA — Ley 37/1992 del IVA art. 4.1LIVA — Ley 37/1992 del IVA art. 20.1.10
Affects CompanyExpat · Non-residentIndividual
V1545-19 24 Jun 2019

Legal costs award treated as capital gain rather than professional income

SG de Impuestos sobre la Renta de las Personas Físicas
condena en costasganancia patrimonialindemnizaciónrendimientos profesionalesgastos de defensa LIRPF — Ley 35/2006 del IRPF art. 33.1LIRPF — Ley 35/2006 del IRPF art. 34.1.b
Affects CompanyExpat · Non-residentIndividual
V1528-19 24 Jun 2019

Income from self-publishing books classified as income from economic activities

SG de Impuestos sobre la Renta de las Personas Físicas
rendimientos del trabajoactividades económicasderechos de explotaciónautopublicaciónpropiedad intelectual LIRPF — Ley 35/2006 del IRPF art. 17.2.dLIRPF — Ley 35/2006 del IRPF art. 17.3
Affects CompanyExpat · Non-residentIndividual
V3271-18 26 Dec 2018

Grants for elite athletes may be taxed as business income or capital gains

SG de Impuestos sobre la Renta de las Personas Físicas
rendimientos de actividades económicasrendimientos profesionalesganancia patrimonialdeportista de alto rendimientoactividad económica LIRPF — Ley 35/2006 del IRPF art. 27.1LIRPF — Ley 35/2006 del IRPF art. 33.1
Affects CompanyExpat · Non-residentIndividual
V4844-16 10 Nov 2016

No obligation to withhold IRPF on professional fees paid by costs judgment

SG de Impuestos sobre la Renta de las Personas Físicas
condena en costasretenciónrendimientos profesionalesindemnizaciónobligado a retener RIRPF — RD 439/2007, Reglamento del IRPF art. 76LGT — Ley 58/2003 General Tributaria art. 89.1
Affects CompanyExpat · Non-residentIndividual
V2681-15 17 Sept 2015

A 15 per cent withholding tax applies to income from professional activities

SG de Impuestos sobre la Renta de las Personas Físicas
retenciónrendimientos profesionalesactividades profesionalesingreso a cuentatipo de retención LIRPF — Ley 35/2006 del IRPF art. 68.4LIRPF — Ley 35/2006 del IRPF art. 101.5.a
Affects CompanyExpat · Non-residentIndividual

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