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V2030-17 26 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Residential leases for reception centres are VAT exempt if the tenant is not a business owner

A foundation leasing residential properties for reception centres for people at risk of social exclusion has enquired whether these leases are exempt from VAT. The Directorate General for Taxes (DGT) has ruled that the exemption applies provided the tenant does not hold the status of a business owner or professional for tax purposes.

The question raised

Exemption of the residential leases of which the consultant is the lessee.

The DGT's ruling

The lease of a dwelling is exempt from VAT when the lessee is the final consumer, even if they allow other persons to use the dwelling. For the exemption to be applicable, the lessee must not have the status of entrepreneur or professional, which occurs if they exclusively provide services free of charge. In this case, the exemption is maintained even if the entity cedes the dwelling to third parties for use as a shelter.

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