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V2026-23 12 July 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · medio propio personificado

Services provided by a municipal commercial entity as a self-owned medium are exempt from VAT

A commercial entity owned by a municipality asks whether the parking management service it provides to the municipality is subject to VAT and whether it can deduct the VAT paid. The DGT responds that the service is not subject to VAT and that the entity may apply an imputation criterion for deduction.

The question raised

Liability for Value Added Tax of this service provided by the consulting entity to the City Council and the deductibility of the tax amounts incurred in relation to the same.

The DGT's ruling

The collection services provided by the entity, insofar as it acts as a personified self-managed means of the City Council or is a public sector entity providing services to the Administration on which it depends, are not subject to VAT pursuant to Article 7.8 of Law 37/1992. Regarding deduction, if the entity jointly carries out taxable and non-taxable operations, it may deduct the tax amounts on goods and services intended simultaneously for both through a reasonable and consistent allocation criterion. However, the tax amounts on acquisitions intended exclusively for non-taxable operations shall not be deductible.

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