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A City Council enquired whether the transfer of a commercial premises and garage spaces, received as consideration for subsoil, was subject to VAT. The DGT ruled that, if it is the developer's first supply, the transaction is subject to the standard rate of 21%.
This ruling clarifies the VAT treatment for land swaps involving property transfers, confirming that such transactions are subject to VAT if they constitute the developer's first supply, and establishes the rules for tax accrual and the period for tax liability.
The tax team reviews your specific situation.
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