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V1490-24 18 June 2024 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

VAT on museum works cannot be deducted if activities are taxable but exempt

A Regulatory Council for a Protected Designation of Origin has enquired whether it can deduct VAT on a renovation project affecting a museum and its offices. The Directorate-General for Taxes (DGT) ruled that ticket sales for the museum are exempt from VAT and, consequently, do not grant the right to deduct the input tax incurred.

The question raised

Question raised. The deduction of Value Added Tax installments for the said transformation project is questioned, considering that the actions to be carried out will affect both the museum and the spaces in which the general administrative services of the Regulatory Council are located.

The DGT's ruling

The provision of services consisting of the sale of tickets for museum visits is exempt from VAT as it is a public law entity. The right to deduction only arises when the goods and services are used in taxable transactions, not in exempt ones. Therefore, if exclusively exempt activities are carried out, there is no right to deduct the input tax incurred for the works to adapt the museum space.

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