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V2452-16 6 June 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IVA · deducción de cuotas

VAT on works and supplies may be deducted if they are used directly and exclusively for the economic activity

A stonemason inquires whether they must register under a different heading to invoice themselves for improvement works on their plot. The DGT responds that the deductibility of VAT depends on whether the goods and services are used directly and exclusively for the business activity.

The question raised

Question posed: Is it necessary to register under another heading and invoice oneself for these works?

The DGT's ruling

The entrepreneur may deduct the amounts incurred for the acquisition of goods and services provided they are used directly and exclusively for their business activity. In the case of investment goods, partial deduction is permitted according to the rules of Article 95.Three of the VAT Law. To exercise this right, it is essential to possess the original invoice that complies with the regulatory requirements.

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