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V1963-14 18 July 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ejecución hipotecaria

The successful bidder in a mortgage foreclosure is the taxable person for VAT, and the selling company must not charge it

A company sought clarification on whether it should charge VAT on an invoice for an urban plot of land sold at public auction following a mortgage foreclosure. The DGT ruled that, as the successful bidder is the taxable person under the reverse charge mechanism, the company is not required to charge the tax.

The question raised

Propriety of the charging of VAT on an invoice. Rectification

The DGT's ruling

The transfer of a buildable urban plot in execution of a guarantee is subject to VAT, but the taxable person is the successful bidding credit institution pursuant to Article 84.One.2, letter e). Therefore, the selling company must issue an invoice without charging the tax. If it had been incorrectly charged, the rectification must be carried out by means of a credit note in accordance with Article 89 of the VAT Act.

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