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V0949-16 10 March 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · empresario

One cannot act as a VAT-registered entrepreneur to deduct tax on a personal residence

A taxpayer inquired whether they could register as an occasional entrepreneur to reclaim VAT on the construction of a home for their own use. The Directorate-General for Taxes (DGT) ruled that, as the property is not intended for sale, the individual acts as a final consumer and is therefore ineligible to deduct the tax.

The question raised

Possibility of registering occasionally as an entrepreneur and thus being able to request the refund of the tax incurred.

The DGT's ruling

To be considered a VAT entrepreneur, the promotion or construction of buildings must be intended for sale, allotment, or transfer under any title. When constructing a dwelling for personal use without the intention of selling it, the condition of being an entrepreneur is not met, and the individual acts as a final consumer. Therefore, it is not possible to deduct the tax or request its refund.

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