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V0714-15 4 March 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · arrendamiento de bienes

Leasing property to a company for tourism exploitation is subject to 21% VAT

An individual leases a property to a company for the purpose of sub-letting it as tourist accommodation. The DGT has ruled that this transaction is subject to 21% VAT and that the owner must register with the tax census.

The question raised

Applicable tax rate to said lease and whether the consultant must register in the census as an entrepreneur.

The DGT's ruling

The lease of real estate to a legal entity for subsequent assignment in the course of a business activity ceases to be exempt and becomes subject and not exempt. In this case, as it is leased to a company for its exploitation, the transaction is taxed at the general rate of 21%. The owner is obliged to submit periodic returns and the annual summary return when performing subject and not exempt operations.

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