- The Spanish DGT held that VAT deducted on apart-hotels originally intended for hotel operation must be adjusted in one lump sum if, before they ever enter use, the developer changes their destination to sale as housing.
- The initial VAT on acquisition and renovation was deductible because the intended hotel use gave rise to deduction rights, subject to the general VAT conditions.
- For the eventual sale, if the works qualify as “rehabilitation” for VAT purposes, the sale is treated as a first supply and is taxable and not exempt; if not, it is generally a second or later supply that is exempt unless the exemption is waived.
- If the sale is exempt and no waiver is made, previously deducted VAT must be reversed; because the properties never entered service, the DGT rejects prorated adjustment over the investment period and requires a single adjustment under Articles 99(2) and 114 of the VAT Act, consistent with CJEU case C-791/18 (Stichting Schoonzicht).
Source: allyon-etl.es
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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