Back to index
V2020-17 26 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

VAT on homeowners' association expenses may be deductible if invoicing requirements are met

A property owner renting a residence subject to VAT has enquired whether they can deduct the VAT on common expenses paid to the homeowners' association. The Directorate-General for Taxes (DGT) has ruled that this is possible provided the invoice breaks down the proportional share or follows an alternative method based on European case law.

The question raised

Whether the taxpayer may deduct the portion of the Value Added Tax amounts charged to the community of owners that correspond to the expenses paid to it.

The DGT's ruling

Entrepreneurs or professionals may deduct VAT on community expenses if the invoice specifies, distinctly and separately, the portion of the taxable base and the tax amount charged to each owner. Alternatively, according to the CJEU case law, an entrepreneur may deduct the amounts incurred through the community by means of a duplicate invoice issued in the name of the community, even if the breakdown is not provided, by proving their participation with other documents. This option is only valid if the community does not hold the status of an entrepreneur or professional.

Book your free first meeting