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V0029-22 4 January 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Subject passive investment in photovoltaic installations requires the work to be construction or rehabilitation

A company asked whether installing photovoltaic systems on third parties' premises allowed applying the subject passive investment in VAT. The DGT responded that it depends on whether the work is considered construction of a building or its rehabilitation.

The question raised

Application of the reverse charge mechanism for Value Added Tax purposes in the operation of construction and assembly of the photovoltaic installation.

The DGT's ruling

The reverse charge mechanism applies if the work consists of the construction of a solar park on land, as the whole is considered a building. If the installation is on the roof of an already constructed warehouse, the reverse charge only applies if the work qualifies as a renovation according to the requirements of the VAT Law. Otherwise, the contractor must charge VAT to the developer.

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