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V1049-14 14 April 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entidad urbanística

Contributions to compensate for unpaid fees from other owners are not subject to VAT

A property management entity inquired whether contributions made by owners to cover the non-payment of other members are subject to VAT. The Directorate General for Taxes (DGT) ruled that, as these do not constitute consideration for services, no taxable transaction exists.

The question raised

Liability for Value Added Tax regarding the contribution made to the consulting entity.

The DGT's ruling

Contributions made by owners to compensate for the lack of payment of fees by other owners, which shall be reimbursed once the defaulting debtor pays, do not constitute consideration for the supply of goods or the provision of services. Therefore, there is no transaction subject to Value Added Tax.

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