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V1463-22 21 June 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · deducción

Supply costs for rented office property can be deducted if used exclusively for business activity

A physical person owning office property asks whether they can deduct VAT on supplies. The DGT responds that only water, electricity or telephone charges can be deducted if used exclusively for the business activity giving rise to the deduction.

The question raised

Deduction of property supply expenses for Value Added Tax purposes.

The DGT's ruling

To exercise the right to deduction, goods or services must be applied directly and exclusively to the business or professional activity. VAT on acquisitions used simultaneously for business and private purposes may not be deducted. Therefore, supplies shall only be deductible to the extent that they are used exclusively in the activity generating the right to deduction.

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