Dahianna Jiménez for The Observer
Regarding VAT, a recent position of the Directorate General of Taxation (DGT) deserves special attention.
We are discussing Official Letter MH-DGT-DNTI-DCN-CONS-0002-2026, which addresses the issue of VAT proportionality when there are non-subject operations.
Before discussing proportionality, it is essential to understand when it should be applied.
Simply put, this methodology is used when a company carries out operations that generate the right to a tax credit along with others that do not.
Or when carrying out transactions subject to different VAT rates, and it is not possible to directly identify or separate the purchases and expenses associated with each type of transaction.
What the official tax office document says
Now, in 2023, through Official Letter MH-DGT-OF-119-0059-2023, the Tax Administration indicated that certain operations not subject to VAT must be excluded from the proportionality calculation.
This could lead to the interpretation that, if the rest of the operations were subject to tax, the company could use 100% of the VAT paid on its purchases as a tax credit.
It is quoted verbatim: “In conclusion, in the particular case, regarding the proportionality rule to determine the Total Proportion of operations without the right to Credit, the calculation indicated in articles 23 of the LIVA and 34 of the RLIVA must be applied.".
“(...) excluding sales of vehicles that are not subject to VAT, resulting in the calculation effect that the petitioner would be entitled to a full tax credit for the tax borne on the acquisition of goods and services used in carrying out taxed operations.
A clarification
However, in the Official Letter issued in 2026, it clarifies the scope of that position.
The DGT maintains that certain non-taxable operations must be excluded from the proportionality calculation, but warns that this does not mean they generate the right to a tax credit.
The difference lies in identifying what each purchase was made for. If an expense is related solely to a taxable activity that generates the right to a tax credit, the VAT can be credited.
If it is exclusively related to a transaction that does not generate that right, the VAT must be part of the cost or expense.
Proportionality comes into play mainly when there are shared expenses used for both activities and it is not possible to clearly identify their destination.
Therefore, a company could have a mathematical proportionality of 100% and still not be entitled to credit all of the VAT paid.
Take note!
The message to taxpayers is simple: before calculating proportionality, it is necessary to determine which activity each expense corresponds to.
This criterion obligates companies to maintain an adequate separation of operations through cost centers, as well as the documentation of their purchases.
More than a change in the formula, this is an important clarification regarding the rules for using the VAT tax credit.