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A local council has enquired whether it can waive the VAT exemption when acquiring non-developable land. The Directorate General for Taxes (DGT) has ruled that this is not possible, as the council is not acting as a business or professional and will not use the property for an activity entitled to VAT deductions.
This ruling clarifies that public entities cannot opt into the VAT regime for land acquisitions unless they meet the specific criteria of acting as a taxable person engaged in a business or professional activity with deduction rights.
The tax team reviews your specific situation.
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