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V2922-23 31 October 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · subarriendo

Residential leases intended for subletting are subject to VAT and require regularisation via amending returns

A company sought clarification on whether it should charge VAT for a lease that, following a court ruling, was found to be for subletting purposes. The DGT has ruled that the transaction is subject to VAT and that the company must submit amending returns for the affected periods.

The question raised

To determine whether Value Added Tax must be charged on the installments accrued since the judgment became final or since the commencement of the contract, as well as the manner in which said accrued installments must be regularized. Specifically, whether supplementary returns must be filed for each period or whether said installments should be included in the tax return for the period in which the judgment became final.

The DGT's ruling

The lease of a dwelling ceases to be exempt from VAT when the lessee uses it for subletting or assignment to third parties. If more than one year has elapsed since the accrual, the taxable person loses the right to charge the tax to the recipient, whereby the tax is deemed to be included in the agreed price. The regularization must be carried out through the submission of amending tax returns for each period, applying the corresponding surcharges and late payment interest.

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