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A City Council has enquired whether the purchase of land containing a ruined dwelling, classified as an area for public roads, is subject to VAT. The Directorate General for Taxes (DGT) indicates that liability depends on whether the seller is a businessperson or professional, though the transaction could be exempt due to its intended use.
This ruling clarifies the VAT implications for local authorities acquiring land for public infrastructure, highlighting the distinction between taxable business activities and exemptions based on the land's ultimate purpose.
The tax team reviews your specific situation.
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