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V0330-25 18 March 2025 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Subject passive investment applies to construction works; subsidy does not form part of VAT base

A comarcal authority asked whether modernisation works on a waste plant were subject to subject passive investment and whether the received subsidy for financing them was subject to VAT. The DGT confirms that subject passive investment applies and that the subsidy does not constitute part of the VAT base.

The question raised

Whether the reverse charge mechanism of Value Added Tax provided for in Article 84.One.2.f) of Law 37/1992 would be applicable to the execution of the works subject to this inquiry. Whether the payment of said capital subsidy is subject to Value Added Tax.

The DGT's ruling

The reverse charge mechanism is applicable to the taxable person because the works consist of the construction of buildings and the recipient is a businessperson or professional. Regarding the subsidy, it is not considered linked to the price of the transactions subject to tax, and therefore does not form part of the VAT taxable amount.

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