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V3001-20 5 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · comunidad de bienes

Leasing of premises by a community of property is subject to VAT if the entity acts as a business owner

A query was raised regarding the VAT and Personal Income Tax (IRPF) treatment of leasing commercial premises owned by a community of property. The DGT determines that the lease is subject to VAT if the community assumes the entrepreneurial risk and venture, and for IRPF purposes, it will be treated as income from real estate capital or imputed rental income.

The question raised

Taxation in Personal Income Tax and VAT regarding the sporadic rental of the premises

The DGT's ruling

If the community of property organizes means and assumes risk jointly, it holds the status of an entrepreneur and the rental is subject to VAT at the general rate of 21%. For Personal Income Tax purposes, as it is not an economic activity, rental periods are taxed as income from real estate capital and unrented periods as imputation of real estate income. The income is attributed to each co-owner according to their legal ownership of the property.

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