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V0672-17 15 March 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Application of the reverse charge mechanism to warehouse construction and industrial equipment supply

A company requested clarification on whether the construction of a cold storage warehouse and the installation of its equipment should be subject to the reverse charge mechanism. The DGT ruled that, as it involves a new building project, this mechanism applies to both the construction works and the supply involving installation.

The question raised

Question raised: Application of the reverse charge mechanism to the construction of the warehouse and, where applicable, to the installation of insulation and equipment by the contracting company and the method for rectifying the operation.

The DGT's ruling

The reverse charge mechanism applies when the recipient is a business or professional and the operation involves the urbanization, construction, or rehabilitation of buildings. In the case of new construction, the mechanism applies both to the works and to the insulation and the supply with installation of industrial equipment. It does not apply if the services are provided in already completed buildings or if they are mere maintenance, repair, or conservation operations.

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