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V0430-21 1 March 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · renuncia a la exención

Purchase of a building for professional activity may be subject to VAT by renouncing exemption

The consultant asks whether the purchase of a property for professional use from a French seller is subject to VAT. The DGT explains that if it is a second or subsequent delivery, the transaction is exempt, but the buyer may request renunciation of exemption to make it subject to VAT.

The question raised

It questions the liability of the operation for Value Added Tax and the possible application and requirements, where applicable, of the reverse charge mechanism.

The DGT's ruling

If the transfer is a second or subsequent delivery of a building, the operation is exempt from VAT, but the taxable person may waive said exemption if the acquirer is a professional entitled to deduction. In the event of a waiver, the operation shall be subject to the reduced rate of 10% and the reverse charge mechanism shall apply. If the exemption is not waived, the operation shall be subject to Transfer Tax.

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