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V0529-22 17 March 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Inversion of the passive party not applicable to supply of materials without installation for solar energy projects

An engineering company asked whether the supply of materials for photovoltaic or thermal solar parks allowed the inversion of the passive party. The DGT replied that if the supply is without installation, it is not considered execution of works and VAT must be charged; if it includes installation, the inversion may apply if construction or urbanisation requirements are met.

The question raised

Whether the reverse charge mechanism provided for in Article 84.One.2º f) will apply to the described material supply operations.

The DGT's ruling

The reverse charge mechanism requires the operation to be a work execution, which includes the supply of goods with installation and assembly. The supply of materials that are not subject to installation and assembly is not considered a work execution. Therefore, supply without installation does not allow for the reverse charge mechanism and VAT must be charged on the invoice. If the supply includes assembly and installation and is carried out within the framework of construction or urbanization, the reverse charge mechanism would apply.

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