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V0692-20 3 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Transfer of plots with buildings for demolition is subject to VAT and may qualify for the reverse charge mechanism

A sports club has requested a ruling regarding the taxation of the transfer of plots containing a stadium, followed by its subsequent free provision. The DGT has determined that the transfer of the plots is subject to VAT as the building is intended for demolition, and that the subsequent free provision constitutes self-consumption of services subject to the tax.

The question raised

Whether the delivery of the plots would be subject to and exempt from Value Added Tax. Tax point. Taxable person. Whether the gratuitous assignment of the stadium would be subject to Value Added Tax.

The DGT's ruling

The delivery of plots is subject to VAT because the building contained therein will be demolished by the acquirer, thus the exemption for buildings does not apply. The reverse charge mechanism applies if the land is used for the payment of urbanization charges and the acquirer is a taxable person. The tax point occurs with the public deed, unless its transfer effect is unequivocally excluded. The gratuitous assignment of the property following the transfer constitutes self-consumption of services subject to tax.

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