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V2072-20 23 June 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

VAT deduction on homeowners' association expenses possible under specific conditions

A professional inquired whether she could deduct VAT on expenses incurred by the homeowners' association for her commercial premises and whether the association was required to issue an invoice. The Directorate-General for Taxes (DGT) responded that, although homeowners' associations are not typically considered business entities, there are legal avenues for deduction based on European jurisprudence.

The question raised

Obligation for the community of owners to issue an invoice for said expense, and the deductibility of the Value Added Tax amount incurred by the same.

The DGT's ruling

If the invoice breaks down the tax base and the tax amount for each member, entrepreneurs may deduct their proportional share. Alternatively, if the community is not an entrepreneur, the member may deduct the VAT by means of a duplicate invoice issued in the name of the community, proving their participation with other documents. This exceptional route only applies if the community does not have the status of an entrepreneur or professional.

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