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A local council asks whether electrification works in an industrial plot allow passive party investment. The DGT clarifies that eligibility depends on the nature of the installation and whether it occurs during urbanisation.
Question posed: Applicability of the reverse charge mechanism provided for in Article 84.one.2.f) of Law 37/1992.
The reverse charge mechanism applies to the taxable person if the recipient is an entrepreneur or professional and the work consists of urbanization, construction, or rehabilitation. Substations and transformation centers are considered buildings if they are permanently attached to the ground and are autonomous. Low-voltage electrical supply works are considered urbanization works. However, elements such as bases, towers, insulators, and high or medium voltage cables are not buildings.
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