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V0938-22 29 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · arrendamiento de terrenos

Leasing of land for a wind farm is subject to 21% VAT

An individual leases land to a company for the installation of a wind farm. The DGT has determined that the transaction is not exempt from VAT because the land is being used to install elements related to a business activity.

The question raised

1.) Requirements for the issuance of invoices for the amounts of the lease payments to the commercial entity as lessee.

The DGT's ruling

The leasing of land for the installation of elements of a business activity, such as wind turbines, does not benefit from the VAT exemption provided for rural land. As it constitutes a business activity, the transaction is subject to the general tax rate of 21%. Regarding Personal Income Tax (IRPF), if it is not an economic activity, the income constitutes returns on real estate capital, taxable in the period in which they are received.

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