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V1725-17 4 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · cesión de explotación

Leasing of café operations by an association is subject to 21% VAT

A non-profit association inquired whether leasing its café to a company in exchange for a monthly fee is subject to VAT. The DGT ruled that the transaction is subject to the general rate of 21% and explained how the pro rata rule must be applied to deduct input tax.

The question raised

Taxation under Value Added Tax of the fee paid.

The DGT's ruling

The assignment of the operation of a cafeteria in exchange for consideration is subject to VAT and does not constitute an exemption. When carrying out activities with the right to deduction and others without the right, the pro rata rule must be applied to determine the portion of the input tax that may be deducted. The deduction shall be adjusted according to the general or special pro rata rules as applicable under Law 37/1992.

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