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A social association has enquired whether residential leases intended for subsequent transfer to people at risk of social exclusion are exempt from VAT. The DGT has ruled that, as the end users are not designated in the original contract, the transaction is considered a sublease subject to the standard rate.
This ruling clarifies that for VAT exemption to apply to residential leases, the contract must explicitly identify the end users; otherwise, the transaction is treated as a taxable sublease.
The tax team reviews your specific situation.
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