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V1238-17 18 May 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · empresario o profesional

Sale of residential property subject to VAT if the company previously engaged in leasing activities

A company owning a residential property that was previously rented and subsequently used by its partners seeks clarification on the VAT treatment of its sale. The DGT determines that the company holds the status of a taxable person due to the previous rental activities, meaning the sale is subject to VAT.

The question raised

Treatment of the transaction for Value Added Tax purposes.

The DGT's ruling

The company acquires the status of entrepreneur by having leased the property, allocating the asset to a business activity. The delivery of the building may be exempt as it constitutes a second or subsequent delivery following its construction or rehabilitation. The accrual of the tax on advance payments occurs at the time the amounts received are collected. The deduction of input VAT will depend on whether the goods are allocated to transactions that are subject to and not exempt from VAT.

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