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V1712-18 15 June 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

IVD can be deducted for commercial premises purchase even without tenants if intent to rent is proven

A couple bought two commercial premises to rent but have not yet found tenants. Tax authorities confirm that IVA can be deducted if they can prove their intention from the outset was to use the premises for rental activity.

The question raised

Admissibility of the deduction of the VAT amounts incurred by the acquisition of the premises, even if no tenants have been secured for them to date.

The DGT's ruling

The VAT amounts incurred in the acquisition of the premises shall be deductible provided that the intention to allocate them to the development of a taxable and non-exempt activity can be proven through objective elements. The right to deduction persists even if the activity has not generated taxable operations or if the asset could not be used due to circumstances beyond one's control. The intention must be confirmed at the time of acquisition through evidence such as the nature of the assets, compliance with accounting obligations, or the filing of tax census declarations.

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