Who can make the deduction

Only those who meet the following subjective requirements can deduct VAT :

1. Have the status of businessmen or professionals.

2. Have begun the usual delivery of goods or services corresponding to their business or professional activities.

However, the deduction of fees borne or paid before the start of the usual deliveries of goods or services inherent to the activity is allowed.

Taxable persons who jointly carry out operations subject to tax and not subject in accordance with the provisions of article 7.8 of the VAT Law in relation to public entities may deduct the fees incurred for the acquisition of goods and services intended simultaneously for the realization of one and the other based on a reasonable and homogeneous criterion for allocating the fees. corresponding to the goods and services used for the development of operations subject to the tax (or not subject to tax because they are carried out outside the territory of application of the tax that would give rise to the right to deduction if they had been carried out there).

For these purposes, a reasonable and homogeneous criterion for imputation of the quotas corresponding to goods and services intended simultaneously for both types of operations may be the proportion that represents in each calendar year the total amount, excluding VAT , from the deliveries of goods and services of operations subject to the tax, with respect to the total income obtained by the taxable person for the entirety of his activity.

Obviously, the fees incurred for the acquisition or import of goods or services intended exclusively to carry out operations not subject to article 7.8 of the VAT Law will not be deductible.

In the same way, the general deductibility criteria will apply and, where appropriate, the prorata rule will be applicable.

The provisions of this section will not apply to public service management activities under the conditions indicated in letter a) of article 78.Two.3.º of the VAT Law .