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V1279-21 6 May 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Inversion of the passive party does not apply if services do not constitute execution of works

A company building a solar park asks whether its supplier's services can be considered execution of works to apply the inversion of the passive party. The DGT determines that, based on the facts, such services do not meet the definition of execution of works.

The question raised

Whether the activities carried out by the provider referred to in the consultation request can be classified as a works contract for the purposes of value added tax and whether the reverse charge mechanism provided for in Article 84.one.2.f) of Law 37/1992 would be applicable.

The DGT's ruling

For the reverse charge mechanism to apply to the taxpayer in the construction of buildings, the operation must be a works contract seeking a future result distinct from the goods used. In the case of solar parks, all their elements are considered buildings as they constitute an industrial installation. However, if the services provided do not have the legal nature of a works contract, the reverse charge mechanism does not apply.

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