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V2239-14 2 September 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeto pasivo

No need to repay deducted VAT if directly related expenses are incurred following cessation of activity

The querying entity asks whether it must repay deducted VAT instalments in the event of a potential temporary cessation of its activity. The DGT rules that taxpayer status is not lost through mere cessation if expenses are incurred that are directly related to the previous activity.

The question raised

Obligation to restitute the input tax amounts that have been deducted.

The DGT's ruling

The status of taxable person is not automatically lost upon cessation of activity if expenses directly related to said activity are subsequently incurred. Therefore, the input tax amounts incurred and deducted must not be reimbursed when the taxpayer temporarily ceases activity, provided that the legal requirements for deduction are met. The loss of status as an entrepreneur requires effective cessation and deregistration from the census.

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