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V3106-14 18 November 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · intermediación

VAT not applicable to brokerage fees for leasing property located outside the scope of the tax

A company sought clarification on whether VAT should be applied to a commission for brokering the lease of a commercial premises in Ceuta for a client based in Madrid. The DGT ruled that, as the service relates to real estate located outside the territory subject to the tax, it is not subject to VAT.

The question raised

Question raised: Liability for Value Added Tax.

The DGT's ruling

Services related to real estate are considered to be provided within the territory subject to the tax if the real estate is located therein. For this special rule to apply, the provision must bear a sufficiently direct relationship to the real estate. In the case of mediation in a lease agreement, the real estate is the central and indispensable element of the transaction. As the real estate is located outside the territory subject to the tax, the mediation is not subject to VAT.

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