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A company has requested clarification on whether the acquisition of a building for renovation and subsequent sale as residential units, along with adjacent rural land, is exempt from VAT. The DGT has ruled that the building must be taxed at the standard rate because the exemption does not apply to deliveries intended for renovation, whereas the rural land would be exempt unless the exemption is expressly waived.
This ruling clarifies that renovation projects do not trigger VAT exemptions for building transfers, meaning developers must account for VAT at the standard rate on such transactions.
The tax team reviews your specific situation.
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