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An agricultural company has requested a ruling on the taxation of a land sublease that includes an irrigation system and Common Agricultural Policy (CAP) rights. The DGT has determined that while the transaction is subject to tax, it remains exempt as it constitutes the leasing of land rather than a business activity.
This ruling clarifies that the inclusion of ancillary elements like irrigation systems and CAP rights in a land lease does not change its tax status, maintaining the VAT exemption for land leasing.
The tax team reviews your specific situation.
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