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V1436-18 29 May 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prorrata general

Transfer of non-buildable rural land must be included in the general pro rata denominator

A real estate development company has enquired whether the sale of non-buildable rural land should be included in the general VAT pro rata calculation. The DGT has determined that while the transaction is taxable, it is exempt, and since it does not constitute an investment asset, its value must be included in the denominator used for the pro rata calculation.

The question raised

Calculation of said delivery in the general pro rata of Value Added Tax.

The DGT's ruling

The transfer of non-buildable rural land without urbanization works is subject to but exempt from VAT pursuant to Article 20.One.20º of Law 37/1992. Having ceased to be an agricultural investment asset and having become part of the inventory of the development activity, its amount must be included in the denominator of the general deduction pro rata, in accordance with Article 104.Three.3º of Law 37/1992.

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