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V0083-22 19 January 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Inversion of the passive party applies if buyer uses part of price to pay off mortgage

A company asked whether selling a commercial building, where the buyer uses part of the purchase price to pay off the existing mortgage, triggers the inversion of the passive party. The DGT confirms that this mechanism applies if the buyer is a business operator or professional.

The question raised

Applicability of the reverse charge mechanism provided for in the Value Added Tax Law.

The DGT's ruling

The application of the reverse charge mechanism by the taxable person under Article 84.One.2.e), third indent, of Law 37/1992 requires that the real estate be subject to a security interest and that the acquirer be a businessperson or professional. In the operation under consultation, where the acquirer delivers an amount intended for the cancellation of the mortgage at the same time as the transfer, this circumstance is met. The acquirer must expressly communicate their status as a businessperson or professional to the seller.

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