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V0684-17 15 March 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

Transfer of a building in exchange for cash and future works is subject to VAT

A company acquires a building by paying a price and providing other properties to be constructed or renovated following the transaction. The DGT determines that the transfer of the building is subject to VAT and constitutes a payment in kind towards the future works.

The question raised

Treatment of the operation for Value Added Tax purposes.

The DGT's ruling

The transfer of the building by the transferor is subject to VAT if they are a businessperson or professional and the property is used for their activity. This transfer is considered a payment in kind on account of the future transfer of the properties (future construction). The acquirer of the building, being the taxable person for the future transfer, must charge the VAT due to the accrual of said payment on account at the time the building is made available.

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