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V3941-16 20 September 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · rectificación de cuotas

VAT reduction from 10% to 4% on property deliveries possible if specific requirements are met

A taxpayer inquired whether it is possible to rectify VAT amounts previously applied at 10% to instead apply the 4% rate. The DGT ruled that this is permissible if the purchaser is an entity under a special leasing regime and meets the requirements set out in the Corporate Tax Act.

The question raised

Whether it is appropriate to rectify the Value Added Tax amounts charged at 10 percent by applying instead the rate of 4 percent.

The DGT's ruling

The application of the reduced rate of 4% in the acquisition of housing requires that the acquiring entity applies the special regime of Chapter III of Title VII of the Corporate Tax Law and that the income from subsequent leasing enjoys the relief provided for in its Article 54. If these conditions are met, it is appropriate to rectify the incorrectly determined tax amount by means of a corrective invoice. The rectification must be carried out provided that four years have not elapsed since the accrual.

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