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A non-profit association has enquired whether it can deduct VAT on housing acquired via financial leasing for its employees. The DGT has ruled that, as the entity carries out both taxable and exempt activities with significantly different deduction percentages, it must apply the split-sector regime.
This ruling clarifies the VAT treatment for non-profit entities providing social services, mandating the use of the split-sector regime when managing both taxable and exempt activities to ensure accurate VAT deduction.
The tax team reviews your specific situation.
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