Cooperatives must pay tax on horizontal division deeds

The Directorate General of Taxes (DGT) has issued a relevant ruling for housing cooperatives regarding the treatment of Transfer Tax and Documented Legal Acts Tax (ITPAJD) at the time of the horizontal division of property.

What the DGT has ruled

The query analyzed whether the horizontal division deed, necessary to fulfill the corporate purpose of a cooperative, could benefit from the exemption provided in Article 34 of Law 20/1990. The body has ruled that said exemption is limited exclusively to operations involving the acquisition of goods and rights intended for the entity's social purposes, which are taxed under the modality of onerous property transfers.

In this case, the horizontal division deed does not constitute an acquisition of assets, but rather is taxed under the modality of documented legal acts. Therefore, the DGT establishes that applying the exemption to this legal act would constitute an application of analogy, which is prohibited by Article 14 of the General Tax Law.

What this means for you

For housing cooperatives, this ruling implies a direct tax burden. Since the cooperative tax regime exemption cannot be applied to the horizontal division deed, the entity must settle the corresponding tax under the documented legal acts modality. This fact must be integrated into the operation's cost structure, as the regulations do not allow the benefits of acquisitions to be extended to this type of formal act.

What should be done

It is necessary for cooperatives to analyze their tax situation and the costs derived from the horizontal division of their assets. Given that the exemption has a limited scope and is strictly linked to the acquisition of assets, it is recommended to assess each case and ensure that the ITPAJD settlement is carried out according to the documented legal acts modality to avoid possible contingencies with the Tax Administration.