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V0387-18 14 February 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · cargas urbanísticas

Payment of economic compensation for urban planning burdens or execution of works is not subject to VAT

A query was raised regarding whether the fulfilment of external urban planning burdens (such as works or economic payments) is subject to VAT. The DGT ruled that neither the economic compensation substituting for land transfers nor the execution of mandatory works are subject to the tax, although the transfer of a plot of land to settle these burdens may be.

The question raised

Taxation under Value Added Tax regarding the fulfillment of external urban planning obligations.

The DGT's ruling

The economic compensation in lieu of the mandatory obligation to cede land does not constitute an operation subject to VAT. The execution of mandatory works (such as roundabouts or roads) is considered a gratuitous provision of services and is not subject to the tax. However, if the obligation is fulfilled through the delivery of a plot of land by an entrepreneur, the operation shall be subject to VAT and shall not be exempt.

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