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V0516-17 1 March 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · empresario o profesional

Sale of urbanised plots subject to VAT if the owner acts as a businessperson or professional

An owner of urban plots sought clarification on whether the sale of their land to an individual was subject to VAT after having participated in the urbanisation process. The DGT ruled that, given the evidence of intent to sell and the fact that urbanisation costs were incurred, the owner acquires the status of a businessperson and must apply the tax.

The question raised

Subjectivity to Value Added Tax regarding the future sale of the plots by the consultant to a private individual.

The DGT's ruling

Landowners acquire the status of entrepreneur or professional when urbanization costs are imputed to them and they have the intention to sell or transfer the land. This intention to sell must be confirmed by objective elements. In this case, registration as a developer and the transfer in payment of plots for urbanization are indications of such intention, which subjects the deliveries of goods to VAT.

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