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A company that purchases and renovates properties for resale, while also performing masonry works, has enquired whether it can deduct VAT on the latter. The DGT has ruled that such VAT may be deductible, provided it is determined whether the activities constitute distinct sectors and the appropriate deduction regime is applied to each.
This ruling clarifies the conditions under which VAT incurred on construction activities can be recovered by companies engaged in multiple business lines, emphasizing the need for proper sectoral classification.
The tax team reviews your specific situation.
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