Skip to content
Back to index
V2195-23 26 July 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · empresario

VAT should not be charged or invoices issued when splitting electricity costs between residential developments

A compensation board enquired whether it should issue VAT invoices when splitting the cost of electricity used for water pumping between three residential developments. The DGT ruled that the board does not hold the status of a business entity and that the allocation of expenses does not constitute a business activity.

The question raised

Whether the consultant is obliged to issue an invoice with the imposition of Value Added Tax.

The DGT's ruling

The entity is not a VAT entrepreneur or professional because it does not organize means to carry out a business activity while assuming risk and venture. The allocation of common utility expenses does not constitute a business activity, but rather the entity acts as a final consumer. Therefore, it must not charge the tax nor issue an invoice, although the parties may use other documents for the operation.

Book your free first meeting