Skip to content
Back to index
V0293-20 7 February 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · establecimiento permanente

The tenant is the VAT payer if the owner has no permanent establishment in Spain

A non-resident individual renting property in Spain asks who is liable for VAT and whether they can claim it. The DGT states that if the owner has no human or technical resources in Spain, the tenant will be the VAT payer by virtue of the 'passive investment' rule.

The question raised

Who is the taxpayer for the lease operations consulted, and whether the consultant is entitled to the deduction or refund of the Value Added Tax amounts incurred within the territory of application of the Value Added Tax.

The DGT's ruling

The ownership of real estate does not, in itself, determine the existence of a permanent establishment. For it to exist, the non-resident must have a structure with sufficient human and technical resources to provide the service independently. If such a structure is not proven, the taxpayer shall be the lessee (if they are an entrepreneur or professional). In that case, the non-resident owner must request the refund of the taxes incurred through the special procedures set forth in Articles 119 or 119 bis of Law 37/1992.

Book your free first meeting