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V0836-21 8 April 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Subject passive investment applies to machinery supply with installation in construction works

A company asks whether purchasing machinery and equipment for its new industrial plant allows subject passive investment. The DGT responds that it only applies if the supply includes installation and assembly within a construction or rehabilitation project.

The question raised

Application of the reverse charge mechanism in the acquisition of new industrial machinery and equipment.

The DGT's ruling

The reverse charge mechanism for the taxpayer requires that the recipient be a business person, that the operation be one of urbanization, construction, or rehabilitation, and that it be a performance of works. The supply of goods with installation and assembly is considered a performance of works. The mere supply of machinery without installation is not a performance of works and does not allow for the reverse charge mechanism.

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