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V0207-21 10 February 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · permuta

Mutual termination of land-for-future-works exchange constitutes a new taxable event for ITP and IIVTNU

A company intends to return land to its original owner following the mutual termination of a 2008 exchange agreement. The DGT examines whether this return is subject to VAT, ITP/AJD, and IIVTNU.

The question raised

Question posed: Whether the transfer of the land to the original owner as a consequence of the mutual agreement resolution of the exchange contract is subject to Value Added Tax as well as Transfer Tax and Stamp Duty and the Tax on the Increase in Value of Urban Land.

The DGT's ruling

Regarding VAT, the refund is not a new supply, but a resolution that allows for the rectification of taxation through a credit note. For ITP/AJD, mutual agreement does not allow for the refund of the previous tax and is considered a new taxable event. Regarding IIVTNU, the resolution by mutual agreement does not entitle one to a refund and the transfer of the taxpayer's properties to the transferor is considered a new taxable event.

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