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V0278-19 12 February 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Requirements for the application of the reverse charge mechanism by the taxable person in real estate construction works

An agricultural company has requested clarification on whether the VAT reverse charge mechanism applies to the construction of an industrial warehouse and its ancillary works. The Directorate General for Taxes (DGT) has ruled that if the warehouse is considered an ancillary construction of the agricultural business, it does not constitute a building, and therefore the reverse charge mechanism does not apply.

The question raised

Applicability of the reverse charge mechanism scenario set forth in Article 84.One.2º.f) of Law 37/1992, both to the construction of the warehouse and to the ancillary works.

The DGT's ruling

The reverse charge mechanism does not apply to the taxpayer if the work does not have the classification of a building. Accessory constructions of agricultural holdings that are related to the nature and purpose of the estate are not considered buildings. If the warehouse is an accessory construction, the reverse charge mechanism does not apply. For accessory works, the reverse charge only applies if they derive from a construction contract for a building or if they themselves constitute the construction of a building.

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