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V0335-22 21 February 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Investment of the passive party applies to works contracts between main and subcontractors

A company asked whether the investment of the passive party in VAT applies to operations between a main contractor and its subcontractors. The DGT responds that it applies if the works are considered execution of a construction project and the legal requirements are met.

The question raised

Application of the taxpayer's investment in Value Added Tax to operations formalized between the main contractor and its subcontractors.

The DGT's ruling

The reversal of the tax liability applies to transactions between a main contractor and subcontractors when the works are considered construction works. The requirements must be met that the recipient is a businessperson or professional and that the work as a whole consists of urbanization, construction, or building rehabilitation. Construction works include, among others, the supply of goods subject to installation and assembly, but not the supply of materials without installation.

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