Skip to content
Back to index
V1600-14 20 June 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

Only VAT on taxable activities is deductible

A plastic artist asks about the deductibility of VAT incurred in activities including sales of artworks (taxable) and transfer of copyright (exempt). The DGT responds that only VAT related to taxable and non-exempt operations is deductible, with the prorata rule applying if shared use exists.

The question raised

Deductibility of the tax incurred.

The DGT's ruling

The amounts incurred for the acquisition of goods and services are only deductible if they are allocated to taxable and non-exempt operations. If the professional carries out both taxable and non-exempt activities (delivery of works) and exempt activities (assignment of copyrights), the amounts for goods intended for the exempt activity are not deductible. In the event of shared use, the rule of pro rata (general or special) must be applied to determine the deduction percentage.

Book your free first meeting