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V2239-20 1 July 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · deducción de cuotas

IVD can be deducted for employee housing if business link is proven

A company asks how to prove that housing for displaced employees is linked to its business activity. The DGT states that the link must be direct and exclusive, and the burden of proof lies with the company using any legally admissible means.

The question raised

Method of documenting the aforementioned lease or means of proof that must be provided in the event of future requests by the Administration, to demonstrate the allocation to the business activity and to enable the deduction of the VAT amounts incurred.

The DGT's ruling

To deduct VAT, the acquisition must be made with the intention of using it in the business activity. The allocation must be direct and exclusive, although partial allocation is permitted if it concerns an investment asset. The burden of proof lies with the taxable person and any means admitted in Law may be used, but the tax return and settlement or the mere accounting of the asset shall not suffice.

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