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V0412-22 3 March 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Subject passive investment allowed in apartahotel construction and 10% tax rate on hotel room rentals

The consultant asks about subject passive investment in land purchase and construction, and VAT on hotel room rentals. The DGT confirms that construction allows subject passive investment, but not land purchase, and that hotel room rentals with hotel services are subject to a 10% tax rate.

The question raised

Issue raised: Reverse charge mechanism in Value Added Tax, both regarding the purchase of land and the subsequent construction works. Tax liability on the rental of rooms in an apart-hotel under the described conditions.

The DGT's ruling

The reverse charge mechanism applies to construction works for the building of a new structure, but not to the acquisition of land. The leasing of dwellings or rooms is subject to and not exempt from VAT when the lessor provides complementary services characteristic of the hotel industry. In this case, as accommodation services are provided, the 10% tax rate applies.

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