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V1837-23 26 June 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Transfer of urbanised plot subject to VAT and potential application of reverse charge mechanism

An individual co-owning an urban plot resulting from a land readjustment seeks clarification on whether the transfer of their share is subject to VAT. The DGT determines that, as the plot is already urbanised, the transaction is subject to VAT and the reverse charge mechanism applies due to the existence of ongoing urban development obligations.

The question raised

Whether said transfer was subject to Value Added Tax.

The DGT's ruling

The delivery of land that has already undergone a material urbanization process is subject to VAT. In the case of plots subject to the payment of urban planning charges with current registration-based encumbrances, the reverse charge mechanism provided for in Article 84.One.2, letter e), third dash of Law 37/1992 applies. This occurs when the transfer is carried out by a businessperson or professional in favor of another businessperson or professional.

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