Post by account_disabled on Mar 7, 2024 4:47:23 GMT
Can VAT be partially deducted from the expenses related to the activity? Well it depends, as it almost always happens. To begin with, article 95 of the VAT Law establishes a requirement of direct and exclusive impact, so, in principle, the VAT borne by any mixed expense should be non-deductible . partial VAT deduction Index So where is the nuance? And how is the impact measured? And what about the related expenses? Is all this compatible with Union Law? So where is the nuance? In principle, the nuance is in investment goods , for which Article 95 itself expressly admits partial deduction when the use is partial .
The very concept of investment property is defined by the VAT Law itself in its article 108, and tangible assets must be considered as such -incorporeal assets have no Asia Mobile Number List place in this concept- intended to be used in the company for more than one year and that generate income through their exploitation, not through buying and selling . Additionally, they must have an individual acquisition cost, VAT not included, greater than 3,000 euros. The taxable person who has an investment asset that he uses only partially in business or professional activity may deduct VAT in the corresponding proportional part.
And how is the impact measured? There is no fixed guideline to measure the impact. The jurisprudential criterion is that the use in economic activity is taken into account and that objective elements are used ( judgment of 3-13-2008, Securenta, Case C-437/06 , to which the General Directorate of Taxes usually refers), but there is no specific or concrete criterion that should be used. However, in the case of real estate , which is the example that can most ideally be used for these purposes, the square meters intended for professional and private purposes, respectively, can be a good reference .
And what about the related expenses? It is an interesting question to ask what happens to the related expenses. It has recently been analyzed by the TEAC in Resolution of 7-19-2023, RG 6654/2022 . It has established that it is possible for the taxable person to deduct the VAT contributions incurred for the costs of supplies (water, electricity, gas) to real estate that, forming part of the company's assets, are used both in business activities and for private use . The deduction of these fees must be made in proportion to their use for the purposes of the company's activities. Is all this compatible with Union Law? The partial deduction of partially affected expenses can be understood to fit into the VAT Directive , in particular, in view of the provisions of article 168 bis, which expressly establishes this.
The very concept of investment property is defined by the VAT Law itself in its article 108, and tangible assets must be considered as such -incorporeal assets have no Asia Mobile Number List place in this concept- intended to be used in the company for more than one year and that generate income through their exploitation, not through buying and selling . Additionally, they must have an individual acquisition cost, VAT not included, greater than 3,000 euros. The taxable person who has an investment asset that he uses only partially in business or professional activity may deduct VAT in the corresponding proportional part.
And how is the impact measured? There is no fixed guideline to measure the impact. The jurisprudential criterion is that the use in economic activity is taken into account and that objective elements are used ( judgment of 3-13-2008, Securenta, Case C-437/06 , to which the General Directorate of Taxes usually refers), but there is no specific or concrete criterion that should be used. However, in the case of real estate , which is the example that can most ideally be used for these purposes, the square meters intended for professional and private purposes, respectively, can be a good reference .
And what about the related expenses? It is an interesting question to ask what happens to the related expenses. It has recently been analyzed by the TEAC in Resolution of 7-19-2023, RG 6654/2022 . It has established that it is possible for the taxable person to deduct the VAT contributions incurred for the costs of supplies (water, electricity, gas) to real estate that, forming part of the company's assets, are used both in business activities and for private use . The deduction of these fees must be made in proportion to their use for the purposes of the company's activities. Is all this compatible with Union Law? The partial deduction of partially affected expenses can be understood to fit into the VAT Directive , in particular, in view of the provisions of article 168 bis, which expressly establishes this.