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V0625-22 23 March 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IVA · arrendamiento de viviendas

Leasing of residential or holiday properties is exempt from VAT if no hotel services are provided

A company has requested a ruling on the tax treatment of leasing an eight-apartment building. The DGT has determined that the leasing of residential properties is exempt from VAT, provided the purpose is residential and no hotel industry services are provided, and that income must be recorded for Corporate Tax purposes according to its accounting accrual.

The question raised

Tax treatment of income derived from leasing activities subject to Corporate Income Tax.

The DGT's ruling

The leasing of residential properties, whether as a primary residence or for seasonal use, is subject to and exempt from VAT if the effective purpose is housing and no complementary services characteristic of the hotel industry are provided. In Corporate Income Tax, income from these leases must be included in the taxable base in the fiscal year in which they accrue, in accordance with accounting regulations. No adjustments to the accounting result are required for this concept under the Corporate Income Tax Act.

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