Doctrine by topic · DGT Observatory

Right to Deduction: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Doctrinal reversal High confidence 60 rulings · 2014–2026

Current position

Water distribution operations and hydraulic infrastructure works for irrigation carried out by irrigation communities are subject to IVA (Value Added Tax) at the reduced rate of 10%. As these are taxable operations, the input tax paid for such works generates a right to deduction. The deduction must be regularized if the elements are considered investment goods.

The DGT's position has undergone a shift regarding the nature of the operations carried out by irrigation communities. While in 2024 they were considered non-taxable operations without a right to deduction, the 2026 ruling establishes that they are subject to the tax, thereby allowing the deduction of the input tax paid.

Turning points

  1. V5405-26

    The classification of irrigation community operations changes from non-taxable to subject to IVA. This allows the input tax paid for infrastructure works to generate a right to deduction.

Analysis based on 57 of 60 rulings with a stated position. Updated 23 September 2026.

Rulings on this topic

24
V5134-26 9 Jul 2026

Absorption merger has IVA effects from registration entry

SG de Impuestos sobre el Consumo
fusión por absorcióninscripción registralprorrata de deducciónoperaciones exentasempresario LIVA — Ley 37/1992 del IVA art. 4.1LIVA — Ley 37/1992 del IVA art. 4.2
Affects CompanyExpat · Non-residentIndividual
V2597-25 22 Dec 2025

Digitalisation agents' services fall under 21% VAT rate

SG de Impuestos sobre el Consumo
agente digitalizadorkit digitalsujeción al impuestoexenciónderecho a deducción LIVA — Ley 37/1992 del IVA art. 4.unoLIVA — Ley 37/1992 del IVA art. 5.uno
Affects CompanyExpat · Non-residentIndividual
V0593-25 1 Apr 2025

Consortium fees may be VAT-exempt under specific conditions

SG de Impuestos sobre el Consumo
exenciónderecho a deducciónregla de prorrataentidad sin finalidad lucrativasujeto pasivo LIVA — Ley 37/1992 del IVA art. 4.1LIVA — Ley 37/1992 del IVA art. 5.1
Affects CompanyExpat · Non-residentIndividual
V0236-22 10 Feb 2022

Vacation home rentals are subject to VAT; tenant is liable

SG de Impuestos sobre el Consumo
establecimiento permanentesujeto pasivoexención de arrendamientoderecho a deduccióndevolución de cuotas LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5
Affects CompanyExpat · Non-residentIndividual
V3041-21 7 Dec 2021

UK firms may pay VAT in Spain if services are used here

SG de Impuestos sobre el Consumo
lugar de realizaciónuso y explotación efectivareciprocidad de tratoempresario no establecidoinversión del sujeto pasivo LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 69
Affects CompanyExpat · Non-residentIndividual
V2661-21 4 Nov 2021

Rent of holiday homes with hospitality services subject to 10% VAT

SG de Impuestos sobre el Consumo
arrendamiento de viviendaservicios de hosteleríaexención de arrendamientotipo impositivo reducidoderecho a deducción LIVA — Ley 37/1992 del IVA art. 4.1LIVA — Ley 37/1992 del IVA art. 4.2.b
Affects CompanyExpat · Non-residentIndividual

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