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A query was raised regarding whether the exchange of industrial urban land plots between a company and a City Council is subject to VAT. The DGT ruled that the management of municipal land assets is considered a business activity; therefore, the transfer of such land is subject to VAT.
This ruling clarifies that municipal land management can be classified as a business activity, meaning land transfers by local authorities may incur VAT rather than being exempt.
The tax team reviews your specific situation.
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