Which activities qualify for the deduction?

The following operations carried out in the territory where the tax applies (mainland Spain and the Balearic Islands) are eligible for deduction:

• Supplies of goods and services which are subject to and not exempt from VAT.

• Exports, intra-Community supplies and supplies assimilated to the above.These are exempt transactions, which are eligible for deduction (full exemption).

• The provision of services whose value is included in the taxable base for imports of goods.These are exempt transactions, which are eligible for deduction (full exemption).

• Transactions not subject to tax in Spanish tax territory because they are not located on the Spanish mainland or the Balearic Islands, which would have generated eligibility for deduction if they had been carried out there.

Therefore, not eligible for deduction are transactions that are exempt according to the provisions of art. 20 of the VAT Law (health care, education, certain real estate transactions, social assistance, financial and insurance transactions, among others).