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V2059-20 23 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · comunidad de bienes

Dissolution of a community of property with business activity may be subject to VAT and ITPAJD

A query was raised regarding the taxation of the dissolution of a community of property involved in land development and the donation of undivided shares. The DGT analyses the impact on VAT, ITPAJD, IRPF, and IIVTNU.

The question raised

Taxation of the dissolution of the community of property, as well as the donation of the undivided share.

The DGT's ruling

The dissolution of a community of property that carried out business activities is equated to the dissolution of a company for the purposes of ITPAJD. For VAT purposes, the allocation of urbanized land or land undergoing urbanization by the community constitutes a supply of goods subject to tax. For IRPF purposes, the division of the common property does not generate a capital gain if allocated according to the ownership share, but it does if there are excesses in the allocation. The donation of the undivided share is not subject to VAT if the co-owners are not business entities.

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