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V1274-14 13 May 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Investment of passive party depends on whether irrigation infrastructure is considered building

A company asked whether its irrigation infrastructure and land parceling works were subject to passive party investment. The DGT states that irrigation infrastructure may be considered building and thus subject to investment, but land parceling is not.

The question raised

Application of the reverse charge mechanism contained in Article 84.One.2, letter f), of Law 37/1992.

The DGT's ruling

Irrigation infrastructure, being a set of connected constructions, may be considered a building and allow for the reverse charge mechanism if legal requirements are met. However, land repartitioning activities do not constitute a land urbanization process nor the construction or rehabilitation of buildings. To apply the reverse charge, the recipient must communicate their status as a businessperson or professional and the nature of the work.

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