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V1717-17 4 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entes duales

Parent associations must apply the dual entity regime for VAT deduction in taxable activities

A parents' association has requested a ruling regarding the deductibility of VAT for activities such as selling school supplies and providing dining services. The Directorate General for Taxes (DGT) has determined that, when carrying out both taxable and non-taxable activities, the dual entity regime must be applied.

The question raised

Deductibility of input VAT.

The DGT's ruling

APAs are not entrepreneurs by nature, but they may be so regarding economic activities carried out habitually and for consideration. Canteen services and the sale of school supplies are subject to VAT. For deduction purposes, quotas for goods intended exclusively for non-taxable operations must be excluded, and a reasonable and homogeneous criterion must be applied to goods used simultaneously for taxable and non-taxable operations.

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