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V0165-22 3 February 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · urbanización

Sale of developed land by a non-resident is subject to VAT and the purchaser is the taxable person

A resident of Belgium requested a ruling regarding the VAT liability on the sale of developed land through a compensation board. The DGT determined that the activity classifies the inquirer as a business entity and that the delivery of developed plots is subject to VAT.

The question raised

1. Liability for Value Added Tax on the sale of urbanized land.

The DGT's ruling

Participation in a compensation board where the board acts as a mere trustee turns the members into entrepreneurs if they carry out urban development or promotion activities. The delivery of urbanized land does not benefit from the exemption for rural land. For a non-resident to have a permanent establishment, they must have a structure with sufficient human and technical resources; mere ownership of real estate is not enough if there is no personnel to manage the activity. In the sale of urbanized land by a non-resident, the acquirer is the taxable person obliged to comply with the tax duties.

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