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V1270-17 25 May 2017 · SG de Impuestos Especiales y de Tributos sobre el Comercio Exterior Criterion in force
OTRO · no sujeción

First registration of a rental vehicle for Municipal Police is not subject to tax

A local council has enquired whether the registration of a vehicle via a rental agreement for its Municipal Police is subject to the Tax on Certain Means of Transport. The DGT has determined that while there is no exemption based on the rental nature, there is a non-liability due to the intended use for security purposes.

The question raised

Applicable tax regime.

The DGT's ruling

The four-year renting contract does not allow for the application of the rental activity exemption as it exceeds the legal timeframes. However, if the vehicle is registered in the name of the city council for the use of the Municipal Police in security functions, the operation is not subject to the tax according to the LIE. This non-subjectivity requires prior recognition from the Tax Administration.

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