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V0880-23 13 April 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Retention of part of the price to cancel a mortgage may trigger passive investment

A company transfers urban properties intended for demolition and asks whether retaining part of the price to cancel a mortgage on one of them triggers passive investment. The DGT confirms that this passive investment rule applies.

The question raised

Whether in the transfer of said property, through the withholding of part of the price by the purchaser for mortgage cancellation, the case of the reverse charge of the Value Added Tax provided for in Article 84.One.2.e), third indent, of Law 37/1992 would be applicable.

The DGT's ruling

The tax reverse charge mechanism provided for in Article 84.One.2.e), third indent, of Law 37/1992 is applicable when the purchaser withholds part of the price to allocate it to the cancellation of the mortgage. This reverse charge applies to the total amount of the sale of the property encumbered by the mortgage security interest. This criterion is maintained after considering that urban planning charges have a legal nature analogous to a mortgage.

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