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V1303-22 9 June 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Installation of signage in buildings may constitute execution of works for passive subject investment

A company asked whether the manufacturing and installation of signage in a newly constructed building constitutes execution of works for applying passive subject investment. The DGT responds that if the signage is installed and becomes part of the property, it qualifies as execution of works.

The question raised

Consideration of the described operation as an execution of works for the purposes of applying the reverse charge mechanism in Value Added Tax.

The DGT's ruling

The execution of works implies the obtaining of a good distinct from those used for its realization. If the manufactured signage is subject to installation and assembly, becoming incorporated into the real estate, the operation is considered an execution of works. Provided that the requirements of the law are met, such as the recipient being a taxable person and the works being construction or renovation, the reverse charge mechanism shall apply.

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