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V0559-18 27 February 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · rehabilitación de edificaciones

VAT on premises acquisition and subsequent supply depends on whether works qualify as renovation

A company acquires a commercial premises to convert it into two dwellings. The DGT examines whether the acquisition and the works are subject to the standard or reduced VAT rate, and whether the final supply of the dwellings will be exempt or subject to VAT.

The question raised

1.- Waiver of the exemption in the acquisition of the commercial premises.

The DGT's ruling

If the works meet the requirements for rehabilitation, the acquisition of the premises and the subsequent delivery of the dwellings shall be subject to VAT. If they are not for rehabilitation, the acquisition of the premises is exempt from VAT (but subject to Transfer Tax) and the delivery of the dwellings shall be a second exempt delivery. Rehabilitation works intended for housing are taxed at 10%, whereas renovation and repair works for recipients who are not natural persons or communities of owners are taxed at 21%.

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