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V1653-17 27 June 2017 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · permuta

Correcting a property identification error is taxed as a property exchange

A taxpayer inquired whether correcting the address of a previously acquired property was exempt from Transfer Tax (ITP) and Stamp Duty (AJD). The Directorate General for Taxes (DGT) ruled that the operation constitutes an exchange of real estate and is therefore subject to taxation.

The question raised

Taxation under ITP and AJD for the proposed operations and, if subject to tax, what the taxable base and the amount of tax would be.

The DGT's ruling

The rectification operation constitutes a transfer of real estate under the modality of exchange. The exemption for the rectification of previous acts is not applicable because the error does not derive from a defect implying the non-existence or nullity of the prior act. Therefore, each party must pay tax on the value of the assets acquired.

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