Back to index
V1952-22 14 September 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Inversion of passive subject applies if promoter acts as entrepreneur or professional

A foundation building residential services property and renting out units asks whether the passive subject inversion applies. The DGT responds that it applies whenever the foundation is considered an entrepreneur or professional for VAT purposes.

The question raised

Whether the reverse charge mechanism provided for in Article 84.One.2º.f) of Law 37/1992 would apply to the construction works of said building.

The DGT's ruling

The reverse charge mechanism for the taxpayer in works contracts for construction or renovation applies if the recipient acts as a business or professional and the operation is a works contract derived from a construction or urbanization contract. In this case, the application depends on the applicant meeting the requirements to be considered a business or professional, which requires the organization of means and that the services are not exclusively gratuitous. If the entity does not hold such status, the reverse charge mechanism shall not apply.

Book your free first meeting