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V0802-14 24 March 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Port dredging investment only applies if part of construction or rehabilitation

The DGT confirms that dredging and maintenance of quays and channels is considered an execution of works since channels are deemed buildings. However, the investment only applies if the main contract relates to urbanisation, construction or rehabilitation of buildings.

The question raised

Application of the reverse charge mechanism provided for in Article 84.One.2º, letter f) of Law 37/1992, to the operations subject to this inquiry insofar as the works may be classified as executions of works on buildings.

The DGT's ruling

Port dredging operations are executions of works on navigation channels, which are considered buildings. Therefore, the reverse charge mechanism applies to the taxable person only if the operations are carried out within a process of land urbanization or the construction or rehabilitation of buildings. The mechanism shall not apply if the main contract does not have as its object the urbanization, construction, or rehabilitation of buildings.

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