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V1459-22 21 June 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · deducción de cuota

Input VAT may be deductible if transactions are taxable and not exempt, even if consideration includes subsidies

A group of entrepreneurs sought clarification on whether they could deduct VAT on expenses while receiving income from fees and municipal subsidies. The DGT ruled that deductibility depends on whether the activities are taxable and not exempt, and whether the subsidies are considered linked to the price.

The question raised

Deductibility of Value Added Tax amounts incurred by the consultant.

The DGT's ruling

The consultant shall be considered an entrepreneur if they carry out onerous activities and may deduct VAT if their operations are taxable and not exempt. Subsidies linked to the price form part of the taxable base of the taxable operations. If they carry out both operations with a right to deduction and exempt operations, they must apply the pro rata rule.

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