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V0140-14 22 January 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · arrendamiento con opción de compra

Lease with option to purchase subject to 10% VAT if the delivery is taxable

An individual has requested clarification regarding the taxation of a residential lease agreement with an option to purchase. The DGT clarifies that the lease constitutes a provision of services, whereas the purchase option is a distinct right, thereby determining the applicable tax rates and taxable bases.

The question raised

Taxation of the aforementioned operation.

The DGT's ruling

Lease with an option to purchase is considered a provision of services until the lessee commits to exercising the option, at which point it becomes a supply of goods. If the supply of the dwelling is subject and not exempt, the lease shall also be subject, applying the 10% rate for the lease and the dwelling, whereas the granting of the option to purchase is taxed at 21%. The taxable base of the lease includes the rent and any other actual credit such as the passed-on IBI.

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