Doctrine by topic · DGT Observatory

Dual Entity: DGT doctrinal evolution

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

← DGT Observatory

How the DGT's position has evolved

Settled doctrine High confidence 27 rulings · 2017–2026

Current position

In dual entities, contributions from private entities are contractual in nature and are subject to IVA (Value Added Tax) if made for consideration. For the deduction of the tax, when there are taxable and non-taxable operations, a reasonable and homogeneous criterion for the imputation of the tax paid must be applied. In the case of basic research expenses without the aim of exploitation, these do not constitute a business activity for IVA.

The DGT's position remains constant in the distinction between business activities and activities of general interest. The use of a reasonable imputation criterion for the deduction of quotas in entities performing mixed activities has been consolidated. No doctrinal shifts are observed, but rather a systematic application of proportionality in the deduction.

Turning points

  1. V0720-19

    Establishes that in dual entities, quotas for goods and services intended exclusively for non-taxable operations are not deductible, allowing for an imputation criterion.

  2. V0124-23

    Reinforces the application of a reasonable imputation criterion for the deduction when the taxable person performs taxable and non-taxable operations.

Analysis based on 24 of 27 rulings with a stated position. Updated 24 September 2026.

Rulings on this topic

24
V2438-23 7 Sept 2023

Water and sewerage supply subject to reduced 10% VAT

SG de Impuestos sobre el Consumo
ciclo integral del aguabase imponibletipo reducidoprorrata especialente dual LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5
Affects CompanyExpat · Non-residentIndividual

Apply this to your case

VAT advisoryTalk to the team applying this doctrine daily.
Talk to the tax teamWe check whether this criterion affects you and what it means in your situation.
Email
Contact