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V0744-20 7 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prorrata general

Income from services provided to an Irish entity counts towards the calculation of the general VAT pro rata

A company with both taxable and exempt activities asks whether income from services provided to an entity in Ireland should be included in its general pro rata. The DGT rules that it must be included, provided that such transactions would have entitled the company to a deduction had they been carried out in Spain.

The question raised

It is questioned whether, for the purposes of calculating the general pro rata of Value Added Tax, income derived from the provision of services to the Irish entity must be included.

The DGT's ruling

Services provided to an Irish entity are understood to be performed in the Member State where the recipient is located. For the calculation of the general pro rata, the income from these supplies may be included provided they are transactions carried out outside the territory of application of the tax that would have given rise to the right to deduction if they had been carried out within said territory.

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