Management of private securities will not affect the VAT deduction pro rata

The management of financial assets at a personal level often raises doubts regarding its impact on the taxation of business or professional activities. A recent resolution from the Directorate General of Taxes (DGT) has clarified the treatment of these operations in relation to Value Added Tax (IVA).

What the DGT has ruled

The query concerned whether financial returns obtained through the management of private assets should affect the calculation of the VAT deduction pro rata. The advisory body has determined that the buying and selling of securities carried out from private assets does not constitute a business or professional activity.

The criterion is based on the fact that these operations lack the purpose of intervening in a habitual and organized manner in the market for exploitation purposes. Since they are not considered a business activity, the DGT establishes that:

• These operations must not be counted as turnover.
• They must not be included in the calculation to determine the deduction pro rata of the taxpayer's business or professional activity.

What it means for you

This resolution has direct implications for entrepreneurs or professionals who simultaneously manage their own financial assets. If you carry out operations with securities on a private basis, these will not alter the VAT deduction percentage of your main activity.

For companies, this implies that financial operations carried out by a partner from their private assets do not affect the calculation of the company's pro rata. In short, the management of private financial assets remains isolated from the sphere of business activity for VAT purposes, preventing the volume of these financial operations from reducing the deduction capacity of the economic activity.

What you should do

It is necessary to distinguish precisely between private investment management and the exercise of a professional activity of intermediation or asset management. The correct segregation of these operations is fundamental to ensure that the calculation of the deduction pro rata strictly complies with Law 37/1992.

Given that the nature of each financial operation can be complex, it is recommended to assess the particular situation of your activity and the composition of your turnover to avoid errors in determining the deduction coefficient.