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V1041-14 11 April 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Reverse charge mechanism does not apply to land transport services unless they constitute works contracts

A company requested clarification on whether a truck driver's services for earthmoving on a construction site were subject to the VAT reverse charge mechanism. The DGT ruled that, as the service constitutes transport rather than a works contract, the requirements for the reverse charge mechanism are not met.

The question raised

Treatment of said operations for Value Added Tax purposes.

The DGT's ruling

For the reverse charge mechanism to apply to the taxable person in works contracts, these must possess such legal nature. Since transport is considered a provision of services pursuant to Article 11.Two.8 of the VAT Law, if the operation is not a works contract or is part of a mixed contract, the reverse charge mechanism of Article 84.One.2.f) does not apply.

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