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V2003-17 26 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción

Free entrepreneurship support activities are not subject to VAT, but facility leasing is

A commercial entity has enquired whether its free support services for entrepreneurs and the leasing of facilities to related parties are subject to VAT. The DGT has determined that free services of general interest are not subject to the tax, whereas the leasing of spaces and material resources is.

The question raised

1.- Liability for Value Added Tax regarding the aforementioned activities.

The DGT's ruling

The provision of entrepreneurship support services without consideration is not subject to VAT as the entity does not hold the status of a taxable person for said activity. However, if the consideration is symbolic or disproportionately lower than the market value, it is considered an operation without consideration. The leasing of facilities and material resources to related companies is a business activity subject to VAT when carried out for consideration. For the deduction of tax quotas, the entity must apply dual entity criteria for transactions that are subject and not subject to tax.

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