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V1391-22 14 June 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · arrendamiento de vivienda

Leasing residential property to a foundation for free use by immigrants may be VAT exempt

A property owner inquired whether leasing a home to a foundation, which will then provide it free of charge to immigrants, is exempt from VAT and whether an invoice must be issued. The DGT ruled that the transaction is exempt and there is no obligation to issue an invoice unless requested by the lessee.

The question raised

Whether said lease is exempt from Value Added Tax. Invoicing.

The DGT's ruling

The leasing of housing to an entity that does not carry out business activities and grants free use to persons in exclusion is exempt from VAT. If the lessee is a businessperson or professional, the exemption only applies if the contract specifically designates the end users and prohibits assignment to third parties. Regarding invoicing, there is no obligation to issue an invoice in operations exempt under Article 20, unless the recipient is a businessperson or professional acting as such or requires it to exercise tax rights.

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