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V2952-14 3 November 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · deducción de cuotas

Business owners may deduct VAT on common expenses of a homeowners' association under certain conditions

A query was raised regarding whether members of a homeowners' association who carry out business activities can deduct VAT on common expenses. The DGT explains that although the association itself is not a business entity, its members may deduct the tax subject to specific conditions.

The question raised

Deductibility of these fees by the co-owners who carry out business activities in the corresponding proportion.

The DGT's ruling

Entrepreneurs or professionals who are members of a community of owners may deduct VAT on common expenses in two ways. First, if the invoice breaks down the proportional amount of the taxable base and the tax amount for each owner. Second, exceptionally due to CJEU case law, if the invoice is issued in the name of the community without a breakdown, provided that the community is not an entrepreneur and the member proves their participation with other documents.

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