Subject to IGIC of the cession of homes for vacation purposes. Binding tax ruling of September 10th, 2015
In recent years has notably increased the business related to rental of housing by individuals for holiday use, i.e. for very short periods of time (usually days) and not for a long term lease. This cession of housing stands out because it becomes available to the user a house during a short period of time, and may normally be accompanied by a cleaning or even some restauration services.
Given the exemption provided by the IGIC Law (Canary Islands Indirect Tax) relating to the leasing of housing, it is asked to the tax authorities in the Canary Islands if the activity of cession of housing under this formula would be covered by this exemption.
In this regard, in response to the query raised, the Authorities recall that IGIC Law does not contain a definition of housing, but nonetheless the exemption is not articulated with an objective of the goods in question, but with a character finalist according to the use given to the goods, being applicable when the object of the contract is the assignment of the building or part thereof as housing and, therefore, being excluded in the case of a tourist establishment which is regulated by the corresponding legislation.
Subject to the foregoing, the regulation of the rental housing for holiday periods of the Autonomous Region of Canarias (RD 113/2005), does establish the rental of holiday housing out of the scope of the Urban Leases Law, thus being provided a tourist accommodation service instead of a rental of housing service, which leaves out of the scope of the exemption from IGIC purposes such transactions, being mandatory to charge the tax.
Attached is a copy in Spanish of the binding tax ruling number 1741.