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A local authority has requested a ruling on whether the direct occupation of a plot in exchange for urban development rights is subject to VAT. The DGT has determined that the transaction constitutes a barter where both transfers may be subject to tax if carried out by taxable persons or professionals.
This ruling clarifies that local authorities must assess their VAT status when engaging in land-for-rights transactions, as such exchanges are treated as barters rather than simple administrative acts.
The tax team reviews your specific situation.
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