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V1845-18 25 June 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios

Façade renovation works must be invoiced to the homeowners' association, not to advertising companies

A query was raised regarding whether construction companies can invoice façade renovation works directly to advertising firms. The Directorate-General for Taxes (DGT) ruled that these are independent transactions: the construction company must invoice the homeowners' association, which in turn invoices the advertising company for the use of the façade.

The question raised

Whether it is correct for construction companies to invoice advertising companies for part or all of the facade adaptation works.

The DGT's ruling

Repair works and the assignment of the facade for advertising purposes are independent operations subject to VAT. The homeowners' association is the recipient of the works performed by the construction company and must bear the tax. For its part, the advertising company is the recipient of the facade assignment carried out by the association. The consideration for the facade assignment cannot reduce the taxable base of the construction works.

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