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V2006-18 4 July 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · patrimonio público del suelo

Sale of industrial land by a local authority is subject to VAT and must be declared upon being made available

A local authority sought guidance on how to declare the sale of industrial land to a company. The DGT ruled that the transaction is subject to VAT as it forms part of the management of public land assets and must be declared when the land is made available to the buyer.

The question raised

The manner in which the inquiring City Council must declare the described sale.

The DGT's ruling

The disposal of land by a City Council constitutes a business activity involving the management of municipal land assets and is therefore subject to VAT. The tax becomes due when the land is made available to the acquirer. In the event of advance payments, the tax becomes due at the time of collection for the amount received. The transaction must be recorded in the tax return corresponding to the period in which it becomes due.

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