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A homeowners' association inquired whether it must demand tax compliance certificates from its contractors to avoid subsidiary liability. The Directorate-General for Taxes (DGT) ruled that, as the association does not carry out an economic activity, the subsidiary liability provisions under Article 43.1.f of the General Tax Law do not apply.
This ruling clarifies that homeowners' associations are exempt from the obligation to verify the tax status of their contractors, as they lack the status of an economic actor under tax law.
The tax team reviews your specific situation.
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