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V1739-22 21 July 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · autoconsumo de bienes

Free transfer of premises to a local council by a developer is subject to VAT

A real estate developer has requested clarification on whether the free transfer of a building's ground floor to a local council for public facilities is subject to VAT. The Directorate General for Taxes (DGT) has ruled that the transaction is subject to the tax, as it is considered the self-consumption of goods.

The question raised

Whether said delivery would be subject to Value Added Tax.

The DGT's ruling

The delivery of a premises carried out by an entrepreneur in the course of their business activity is subject to VAT. As it is carried out free of charge, the transfer of the power of disposal over assets of the business assets is considered self-consumption of goods. Being the first delivery of a building following its construction, the operation is subject to and not exempt from the tax.

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