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V0944-16 10 March 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción

Transfer of a plot of land by a City Council subject to VAT if it holds entrepreneur status

A City Council has requested a ruling regarding the VAT liability of transferring a plot of land to a natural person. The DGT indicates that the transaction will be subject to VAT if the City Council acts as an entrepreneur or professional and the property is used for its business activity; however, it will not be exempt simply because it is a plot of land.

The question raised

Subjectivity of the operation to Value Added Tax.

The DGT's ruling

The transfer of a plot of land shall be subject to VAT provided that the transferor holds the status of entrepreneur or professional and the property is used for their business or professional activity. As it is a plot of land, the exemption for non-buildable land provided for in Article 20.One.20º of Law 37/1992 does not apply. If subject to tax, the City Council shall be the taxable person and must charge the general rate of 21 percent.

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