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An entity in insolvency proceedings asked whether the transfer of its plots is subject to VAT after requesting cancellation from the tax register. The DGT ruled that business status is maintained until the assets are fully liquidated and that land undergoing urbanisation does not qualify for the exemption applicable to rural land.
This ruling clarifies that the cessation of tax registration does not automatically terminate business status for VAT purposes if assets remain, and it limits the scope of VAT exemptions for land development projects.
The tax team reviews your specific situation.
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