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V0028-22 4 January 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Delivery of land and construction constitute a single VAT supply with delivery of buildings as the main service

A company asked whether the transfer of land in ongoing urbanisation and subsequent construction of buildings should be treated separately or as a single operation. The DGT determines that delivery of the buildings is the main service, while delivery of the land and urbanisation works are accessory services.

The question raised

Whether, in the transfer of the land, the reverse charge rule of Value Added Tax provided for in Article 84.One.2º.e) of Law 37/1992 would have been applicable. Whether the reverse charge mechanism provided for in Article 84.One.2º.f) of Law 37/1992 would be applicable to the invoices issued by the consultant to the acquirer for continuing with the urbanization works and the construction and final delivery of the warehouses.

The DGT's ruling

The delivery of the land and the execution of the urbanization works are ancillary supplies to the delivery of the finished warehouses, which constitutes the principal supply. As it is a single operation from an economic perspective, the ancillary supplies follow the same tax regime as the principal one. Therefore, the reverse charge mechanism provided for in Article 84.One.2º.e), third indent, of Law 37/1992 does not apply to the delivery of the warehouses nor to the ancillary supplies.

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