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V1780-17 10 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · cesión de uso

Transfer of grazing rights on municipal forests subject to VAT but potentially exempt

A local council consulted whether the awarding of grazing rights on public utility forests was subject to VAT. The DGT has determined that the operation constitutes a taxable supply of services, although it may be exempt as it involves the leasing of land for agricultural exploitation.

The question raised

Subjectivity of said assignment to Value Added Tax.

The DGT's ruling

The assignment of pastures is a service provision subject to VAT because the City Council acts as an entrepreneur by entering into leases to obtain continuous income. However, said activity may be exempt pursuant to Article 20.One.23 of Law 37/1992, as the object is the use and enjoyment of the rural estate. It is distinguished from hunting leases, where the object is hunting exploitation and not the land.

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