Any professional or entrepreneur whose business is located in a building, whether in a flat or in commercial premises, normally has to bear recurring community expenses and the costs of maintaining the property in good condition. Although these expenses are justified by means of an invoice in the name of the community, there are procedures that allow the deduction of the VAT paid on the community expenses by the owners.
Let us take a closer look at what these procedures are and how to comply with them…
The current VAT regulations may lead us to think that, a priori, deducting input VAT on community expenses is an impossible task, given that the owners’ communities are already final consumers. However, the Directorate General for Taxation clarifies in several of the consultations made that it is feasible to deduct input VAT for those residents who, being professionals or businessmen, have a duplicate of the original invoice sent to the community and can provide reliable documentation accrediting their percentage of participation in the community.
In other words, in order to be able to deduct the VAT paid on community expenses, all we would need to do is
- To have a duplicate of the invoice, even if it does not reflect the participation quotas of the different co-owners.
- Proof of our participation quota in the community by means of some kind of legally valid document (deed of horizontal division and new construction, community statutes, etc.).
It would then be possible to deduct the VAT on the invoice in question. But we must not lose sight of the fact that this would allow us to deduct VAT on recurring expenses (cleaning, electricity, etc.), as well as those arising from maintenance charges (damp, painting, etc.) and/or improvements to the building.
Although this is not the end of the matter, the recovery of the VAT paid on community expenses can be backdated to all the invoices affected in the last 4 years (Spain), which is the tax prescription period, so the amount accumulated during this period can represent a significant sum of money.
At 60dias we are specialists in expense management and have been providing innovative services for the benefit of our clients since 2008. 60dias takes care of requesting from all suppliers a copy or duplicate of the invoices issued to the community during the last 4 years.
Taking advantage of 60dias’ innovative system of digitalisation and information extraction, the corresponding data is retrieved and processed by computer so that the client can deduct the VAT of the community of owners’ expenses in their next tax declaration.
The main advantages that 60dias offers you with this service are, on the one hand, to give you the opportunity to deduct the VAT of an expense item that is not normally taken into account for tax purposes, which your income statement will always appreciate, and on the other hand, that at 60dias we have decided to avoid any kind of interference in the business or administrative processes of our clients during the provision of our services, so that our contracting does not involve any effort on your part (hands free).
What are you waiting for to deduct VAT on community expenses? Don’t hesitate, contact us and we will answer any questions you may still have.