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V0012-21 4 January 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · primera entrega

Completed property deliveries subject to VAT at 4% rate

An real estate developer inquires about VAT applicability on the transfer of finished promotions to leasing subsidiaries. The DGT confirms that such deliveries are VAT liable and that the reduced rate of 4% applies if the requirements of the Corporate Income Tax Law are met.

The question raised

1. Liability for the sale of completed developments by the consultant or the developer subsidiaries to the leasing subsidiaries.

The DGT's ruling

The deliveries of buildings whose construction is completed (evidenced by a final certificate of work) are considered a first delivery and are subject to VAT. If the acquirer intends to dedicate the dwellings to leasing and comply with the requirements of the special regime of Corporate Income Tax, the 4% rate shall apply. In transactions between related parties where the recipient has a limited right to deduction, the taxable base shall be the normal market value.

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