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A company has requested a ruling on whether the transfer of land (comprising both unconsolidated urban land and urban land) is subject to or exempt from VAT. The DGT has determined that if no physical transformation works have commenced and no urbanisation costs have been incurred, the transfer is exempt due to its rural nature.
This ruling clarifies the distinction between urban and rural land transfers for VAT purposes, specifically regarding the threshold for when urbanisation works trigger VAT liability.
The tax team reviews your specific situation.
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