The rest of the regions are subject to but exempt from VAT, so they are taxed on the Tax on Property Transfers and Documented Legal Acts. However, the collection is being ineffective and scarce, due to the serious ignorance of both travelers and the owners of vacation homes.
Ninety-eight percent of travelers who stay overnight in holiday homes on the Iberian Peninsula and the Balearic Islands are unaware that they are required to pay the Property Transfer Tax (ITP) and Documented Legal Acts (AJD) in its modality of onerous property transfers, as they are exempt from VAT provided that the accommodations in which they stay do not provide complementary services of the hotel industry, said María Ángeles Recio Ramírez , professor of Financial and Tax Law at the University of Córdoba, during her speech at a congress on collaborative economy organized by the ECOAQUA Institute of the University of Las Palmas de Gran Canaria (ULPGC).
“It would be necessary to carry out an exhaustive reform of the regulations for the Tax on Property Transfers and Documented Legal Acts. It can be done in two ways, on the one hand, through the inclusion of new taxable events and new scales for vacation home rentals, or by establishing the subjection and non-exemption of these operations in VAT, as has been done. Made in the Canary Islands with the IGIC. We are talking about a lot of money that is not collected because in each leasing operation it represents a small amount, but added together, it represents a niche of wealth for the communities that is untapped,” he explains.
In the case of the Canary Islands, the referral to the IGIC was possible through article 12.4 of Decree 113/2015 of May 22, which approves the Regulation of Vacation Homes of the Autonomous Community of the Canary Islands. Given the doubts, there was a binding tax consultation, number 1741, of September 10, 2015, which established that the provision of the vacation home transfer service is subject to and not exempt from IGIC. All of this, since the Canary Islands are considered in the European Union as a third country for VAT purposes. This adaptation, in turn, allows landlords to deduct the IGIC from the expenses they generate in their homes, something that does not happen at the national level with VAT.
“Ignorance of the Law does not exempt from its compliance,” points out the professor from the University of Córdoba, “which is why the management of this tax is being complicated by the autonomous communities. All rentals for tourist purposes are taxed through the ITP and AJD, as long as the accommodations do not provide complementary services to the hotel industry, such as cleaning, food, etc. Only in these cases, accommodations have to apply a 10% VAT, added to their rate,” she emphasizes.
María Ángeles Recio was one of the speakers this morning at the International Congress: “From the collaborative economy to sustainable tourism”, organized by the Tourism, Land Management and Environment Group (TOTMA) of the University Institute of Research in Aquaculture and Sustainable Marine Ecosystems (IU-ECOAQUA), which has been held in the Aula de Piedra of the ULPGC this week.
The specialist participated in the panel “Tax, criminal and international challenges”, together with Rafael Carlos Ortega, professor of Criminal Law at the University of Córdoba; Silvia Feliu Álvarez, professor at the University of the Balearic Islands; and Carlos Torres, professor at the School of Hospitality and Tourism of Estoril (Portugal), a panel whose moderator was María Aránzazu Pérez, professor at the Public University of Navarra.
