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V0661-20 2 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · patrimonio empresarial

Transfer of garage spaces by a local authority may be subject to VAT if they form part of its business assets

A local authority has requested clarification on whether the disposal of garage spaces (assets acquired through free transfer) is subject to VAT. The DGT indicates that liability will depend on whether these spaces are assigned to a municipal business activity or form part of the management of public land assets.

The question raised

Liability for Value Added Tax.

The DGT's ruling

The supply of real estate by a City Council is subject to VAT if the parking spaces form part of its business assets or the management of public land assets. If it is considered a second supply of buildings, the transaction shall be exempt, unless the taxable person expressly waives such exemption. If not subject to VAT, the transaction shall be taxed under the Transfer Tax.

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