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A company entered into an expropriation agreement for land in exchange for future plots; however, as urbanisation proved unfeasible, these will be replaced by cash payments. The DGT has ruled that the City Council must rectify the VAT originally charged and the company must rectify its deduction.
This ruling clarifies the obligation to adjust VAT when the nature of a transaction changes from an exchange of assets to a monetary settlement, affecting both the supplier's output tax and the recipient's input tax deductions.
The tax team reviews your specific situation.
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