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V1365-16 1 April 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeto pasivo

Taxpayer status and VAT deduction rights maintained during activity liquidation

The taxpayer inquired whether they could deduct VAT on expenses incurred after filing a tax census cancellation, following the acquisition of an asset via court ruling. The DGT ruled that taxpayer status is not lost solely through cessation if the liquidation of assets is ongoing.

The question raised

Deductibility of VAT amounts incurred subsequent to the cessation of activity.

The DGT's ruling

The status of taxpayer is maintained until the effective cessation of activity occurs, which includes the period for the liquidation of assets or the disposal of assets used for the activity. Therefore, VAT amounts incurred for expenses directly related to the activity may be deducted during this process. The expropriation of real estate for public parks or gardens is considered an exempt supply for VAT purposes.

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