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V1804-20 8 June 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

Award of plots in cooperative liquidation subject to VAT if land is under urbanisation

A cooperative asks whether awarding plots to its members during liquidation is subject to VAT and what the taxable base is, given that the land is undergoing urbanisation. The DGT confirms the operation is VAT liable and examines valuation rules depending on whether there is a binding agreement.

The question raised

Liability of said allocation to Value Added Tax, as well as the taxable base of the transaction, since the amount paid by each member of the cooperative to cover urbanization costs is higher than the value set by the Autonomous Community Board for said plots for the purposes of Transfer Tax and Documented Legal Acts Tax.

The DGT's ruling

The allocation of plots through the liquidation of a cooperative constitutes a supply of goods subject to VAT if the entity is a businessperson or professional, a status acquired upon incorporating urbanization costs. If the land is undergoing urbanization or is already urbanized, the supply is not exempt. The taxable base shall be the normal market value if a link exists between the cooperative and the members, provided that the requirements of Article 79.5 of Law 37/1992 are met. If the members are businesspersons or professionals, the reverse charge mechanism shall apply.

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