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V0726-14 17 March 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · autoconsumo

Free transfer of a stadium by a local council constitutes self-consumption subject to VAT

A local council enquired whether the free transfer of a stadium built by local public entities was subject to VAT and whether these entities could deduct construction costs. The DGT ruled that the transfer constitutes self-consumption subject to the tax and that the deductibility of VAT depends on whether the entities' activities are taxable or exempt.

The question raised

Question raised: Existence of self-consumption subject to Tax due to the free transfer of real estate and the admissibility of the deduction of the tax amounts incurred for the construction of the stadium.

The DGT's ruling

The free transfer of the stadium to a third party constitutes self-consumption of goods, therefore the City Council must charge the tax with a taxable base based on the cost of the goods or services used. The entities that construct the stadium act as entrepreneurs if they organize means to carry out the activity. The deductibility of the tax amounts incurred by said entities shall be determined according to whether the goods and services are intended exclusively for non-taxable operations, for taxable operations, or for both simultaneously.

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