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V0846-20 14 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · mediación

Financial mediation services may be VAT exempt if independence and functional requirements are met

A lawyer acting as a financial agent seeks clarification on whether their mediation services are VAT exempt and how to manage input tax deductions. The DGT indicates that mediation is exempt if the agent is an independent third party who does more than merely provide information and assists in finalising the transaction. Furthermore, the agent must apply separate deduction regimes for different business sectors.

The question raised

Issue raised: Deduction of Value Added Tax incurred in the activity of financial agent.

The DGT's ruling

Financial mediation is exempt if the provider is a third party distinct from the parties, known to both, and with a function that goes beyond the mere provision of information to bring the parties together. As legal services and financial intermediation are activities with different CNAE codes and deduction percentages that differ by more than 50 points, they constitute distinct sectors. The taxpayer must separately apply the deduction regime for each sector, applying the pro rata rule for goods and services of common use.

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