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An urbanisation company has enquired whether it must charge VAT to the City Council for urbanisation costs incurred. The DGT has ruled that if the City Council acts as a business or professional, the reverse charge mechanism applies; otherwise, the company must charge the tax.
This ruling clarifies the VAT treatment for public works, determining whether the reverse charge mechanism applies based on the legal nature of the municipality's activity.
The tax team reviews your specific situation.
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