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V0329-20 12 February 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · comunidad de bienes

Joint ownership entities may deduct VAT if they waive exemption on commercial premises purchase for rental

A consultant and their sister plan to acquire commercial premises through a joint ownership entity (comunidad de bienes) for rental purposes. The DGT examines whether the entity can be a taxable person for VAT purposes and whether it can deduct the tax after waiving the exemption on the supply of buildings.

The question raised

Deduction of the Value Added Tax amounts incurred by the acquisition of the premises.

The DGT's ruling

A community of property is a taxable person for VAT purposes if it organizes means and assumes the risk of a business activity jointly and independently of its members. In the transfer of a premises, the supply may be taxable and exempt, allowing the acquirer to waive the exemption if they are a taxable person and the asset is intended for operations that entitle them to deduction. The leasing of business premises is a taxable and not exempt operation that allows for the deduction of input VAT.

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