Skip to content
V2314-21 ·16 August 2021 ·consulta-vinculante Medium impact
Tax

VAT deductibility on property acquisitions and expenses depends on determining distinct sectors and applying the pro rata rule

A company involved in tourist apartment rentals, third-party property management, and IT consultancy has requested clarification on how to deduct VAT from the purchase of a property and other related expenses. The Directorate General for Taxes (DGT) ruled that the company must first identify its distinct business sectors and apply the corresponding pro rata rule based on the specific activity to which the expenses are allocated.

In 6 key points

How it affects those involved

Companies with mixed activities must carefully segment their business sectors and apply pro rata calculations to correctly determine VAT deductibility on assets and expenses.

Lifecycle

2021-08-16PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

Does this provision affect you?

The tax team reviews your specific situation.

Talk to the tax team
This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
Email
Contact