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V2802-17 30 October 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

VAT exemption for commercial premises can be waived if the purchaser is entitled to deduction

A property owner who has ceased business activities wishes to sell a commercial premises and waive the VAT exemption so that the transaction is subject to tax. The DGT rules that the individual retains their status as a taxable person if they have not liquidated their assets, and that the waiver is permissible provided the buyer is a taxable person entitled to deduction.

The question raised

Question raised: Exemption of the transaction and the possibility of waiving it, as well as confirmation that recording the waiver in the public deed of sale constitutes an express waiver that has been sufficiently communicated.

The DGT's ruling

The status of entrepreneur is not automatically lost upon the cessation of activity if the business assets have not been liquidated or if the deregistration from the census has not been formalized. The exemption for second deliveries of buildings may be subject to waiver if the acquirer is a taxable person with the right to deduction. Such waiver must be reliably communicated to the acquirer prior to or simultaneously with the transaction, and may be made in the public deed of sale. It is essential that the acquirer signs a declaration accrediting their status as a taxable person with the right to deduction.

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