Skip to content
Back to index
V0719-15 4 March 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · urbanización de terrenos

Foreign land development services exempt from Spanish VAT

A Spanish client asks whether VAT should be charged or the passive investor rule applied for land development services provided in Africa. The DGT confirms that services linked to immovable property located outside Spain are not subject to VAT.

The question raised

The interested party questions the manner in which they must invoice the service recipient, whether they must charge VAT or not, whether they must or must not apply the reverse charge mechanism and mention it in the invoice, or whether they should simply issue the invoice without charging any tax amount.

The DGT's ruling

Land development services are considered linked to real estate, and their location is the place where said assets are located. As these are lands situated in Africa, the supply is not located within the territory to which the tax applies and is not subject to VAT. Since it is not a taxable operation, the reverse charge mechanism does not apply. The invoice must comply with the invoicing regulations, omitting the tax rate and tax amount data.

Book your free first meeting