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V1157-18 8 May 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

VAT on shared expenses can be deducted if invoices itemise each owner's proportional share

An owner of rural land has enquired whether other co-owners may deduct VAT on electricity and repairs for a common irrigation system if the bills are in their name. The Directorate-General for Taxes (DGT) has ruled that this is possible, provided that invoices or duplicates are issued which itemise the taxable base and the corresponding VAT amount for each recipient.

The question raised

Right to deduction of electricity, repair, and maintenance expenses that are in the name of one of the co-owners.

The DGT's ruling

In order for co-owners to exercise the right to deduction, the invoice must state, distinctly and separately, the portion of the taxable base and the tax amount charged to each of them. This must be done through the issuance of an original and duplicate copies by the party performing the transaction. In this case, the owners may deduct the tax charged to them if they are entrepreneurs or professionals and comply with the other legal requirements.

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