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V1457-14 2 June 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · urbanización de terrenos

VAT on land development may be deductible if four years have not passed since accrual

The taxpayer inquired whether they could claim a refund for VAT incurred on a land development project started in 2008. The DGT ruled that VAT can be deducted provided that four years have not elapsed since its accrual, following the procedure of inclusion in successive tax returns.

The question raised

Question posed: Possibility of requesting a refund of the amounts incurred since the beginning of the urbanization in 2008.

The DGT's ruling

Landowners become entrepreneurs or professionals when urbanization costs are imputed to them through assessments, provided they intend to sell the land. The right to deduct the amounts incurred may be exercised in the tax return for the period in which they were incurred or in subsequent returns, without exceeding a period of four years from the emergence of the right. This exercise must be carried out through inclusion in tax returns and not through supplementary returns or rectifications.

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