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V0303-26 12 February 2026 · SG de Impuestos sobre el Consumo Criterion in force
IVA · obligación urbanística

Urbanistic obligation construction may be exempt from VAT if classified as service provision

A company must build a footbridge free of charge for a municipality due to an urbanistic obligation. The DGT examines whether the work is subject to VAT and whether the cost is deductible.

The question raised

Whether said execution of work is subject to Value Added Tax. Deductibility of the Tax installments incurred by the taxpayer in the construction of the footbridge.

The DGT's ruling

If the execution of the work is classified as a provision of services, it shall not be subject to VAT as it constitutes a mandatory free provision under legal norms. If it is classified as a supply of goods, it shall be subject to the general rate of 21%. The input VAT incurred in the construction shall be deductible if the land is used for an activity generating a right to deduction, such as the leasing of offices.

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