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V0219-20 31 January 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · arrendamiento de locales

Leasing of commercial premises is subject to VAT, regardless of non-profit recreational activities

A commercial property owner sought clarification on whether leasing premises was subject to VAT, given that the tenant used them for non-profit recreational activities. The DGT ruled that the leasing of commercial premises is subject to the tax, as the VAT exemption only applies when the property is used exclusively for residential purposes.

The question raised

Liability for Value Added Tax on the described lease.

The DGT's ruling

The lease of real estate is only exempt from VAT when its effective purpose is exclusive use as a residence. The lease of a business premises for purposes other than residential use is subject to the tax, regardless of whether the lessee carries out non-profit recreational activities. The owner must charge the general rate of 21 percent.

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