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V2817-14 20 October 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Possibility of being VAT liable and deducting VAT when purchasing a property for rental

A taxpayer asks whether, upon buying a property to rent it out, they can become VAT liable and deduct the VAT paid. The DGT responds that this is possible if the seller renounces the exemption for second deliveries of buildings and the buyer proves their intention to carry out a commercial activity.

The question raised

Reversal of the taxable person. Deductibility of the tax borne on the purchase.

The DGT's ruling

The applicants acquire the status of entrepreneurs and taxable persons from the moment of the purchase of the premises with the intention of allocating it to their activity. The transferor may waive the exemption on the delivery of buildings if the acquirer proves the right to full deduction. The deduction of input VAT is appropriate provided that the intention to allocate the asset to the business activity is proven through objective elements.

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