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V1058-20 24 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derechos de aguas

Transfer of groundwater rights subject to 21% VAT

A company has requested a ruling on whether the sale of groundwater rights is subject to VAT and when the tax liability arises. The DGT has determined that the transaction is subject to the tax and that the tax point occurs upon the formalisation of the sale and purchase agreement, subject to the corresponding administrative authorisation.

The question raised

Timing of the tax accrual. Whether the sale of water rights is an activity subject to Value Added Tax

The DGT's ruling

The assignment of water rights in exchange for an agreed price is a transaction subject to VAT at the general rate of 21 percent. The tax point occurs at the moment when, once the sale and purchase agreement has been formalized, the corresponding administrative authorization is obtained. Previous tax points are not ruled out if advance payments exist.

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