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V2867-14 23 October 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · empresario o profesional

Sale of a property by a non-economic society is exempt from VAT

A patrimonial society holding only immovable property asks whether the sale of a property under construction must be subject to VAT. The DGT responds that, as the society carries out no entrepreneurial or professional activity, it is not a VAT taxpayer.

The question raised

Subjectivity of the sale of an unfinished dwelling to Value Added Tax in Spain.

The DGT's ruling

For a transaction to be subject to VAT, it must be carried out by entrepreneurs or professionals in the course of their activity. If a company is limited to the mere holding of assets without carrying out economic activity, it does not hold the status of entrepreneur or professional. Consequently, its transactions are not subject to VAT and it is not entitled to the deduction of input VAT.

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