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V0109-17 20 January 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

Deductibility of VAT on property renovations for tourism use

A private individual asks whether VAT can be deducted on renovation works of a property to be rented to a company for tourism use. The DGT responds that the operation is subject to VAT and not exempt, allowing VAT deduction on the works.

The question raised

Possibility of deducting the expenses incurred for the renovation of said property.

The DGT's ruling

The consultant holds the status of entrepreneur or developer by allocating the property to economic exploitation. The lease to a company that subleases for tourist use is subject to and not exempt from VAT. Therefore, the costs incurred for the renovation may be deducted if the property is foreseeably allocated to a taxable and non-exempt activity, complying with the requirements of Articles 111 et seq. of Law 37/1992.

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