The leasing of a private hire vehicle licence involves the transfer of a right in return for consideration, and this has two tax implications:
- VAT. Leasing the licence constitutes the provision of services subject to VAT (21 per cent): as the lessor, you will need to register for VAT in relation to this activity, issue a monthly VAT invoice to the operator and submit the relevant returns. This is not optional simply because it is ‘passive income’.
- Direct taxation. For personal income tax (IRPF) purposes, the rental income is classified according to your specific circumstances (capital gains from the transfer of rights or business activity if there is a corporate structure); in the case of a company, it is treated as ordinary income for the financial year. It is advisable to clarify the specific classification with your adviser from the very first contract, as this determines tax deductions and the deductibility of expenses.
In practice, landlords with a single licence usually arrange all this through an accountancy firm for a small monthly fee — which you must deduct from your rental income when calculating your net return, as we explain in the question on rental income.
Tenancy agreements processed through VTC360 are legally reviewed and set out each party’s tax obligations in black and white.
LAST REVIEWED · Jul 19, 2026 — VTC360 guide: general criteria, not advice for your specific case.