Skip to content
Back to index
V0673-26 26 March 2026 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Application of passive subject investment in construction or rehabilitation works execution

A plastering company asks whether it must apply passive subject investment to its own services and to those of its subcontractor. The DGT responds that such investment applies when operations are part of an integrated construction or rehabilitation process.

The question raised

It is questioned for Value Added Tax purposes whether the reverse charge rule regulated in Article 84.One.2.f) of Law 37/1992 applies to the services provided by the entity subcontracted to the applicant.

The DGT's ruling

The reverse charge mechanism applies when the recipient is a business or professional, the transaction constitutes a work execution (with or without materials), and the contract arises from urbanization, construction, or rehabilitation works. This mechanism applies both to the contract between the developer and the contractor and within the subcontracting chain. For it to proceed, the transactions must be integrated into the process of construction or rehabilitation of buildings.

Book your free first meeting