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V2204-17 4 September 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · cesión del remate

Assignment of judicial auction bids may be subject to VAT, while property transfer depends on its nature

The query concerns the VAT treatment regarding the assignment of rights to bid in judicial real estate auctions. The DGT distinguishes between the assignment of the right to bid, which is subject to VAT, and the transfer of the property itself, the regime of which depends on whether the transferor is a business entity and the nature of the asset.

The question raised

Treatment of the adjudication operation for Value Added Tax purposes.

The DGT's ruling

If the assignment of the bid is made in such capacity during the auction, the transfer of the right by the creditor to the assignee is subject to VAT as it constitutes a delivery of rights in the course of business activities. The transfer of the real estate shall be subject to VAT if the transferor is a business person and the asset forms part of their assets, and may be exempt depending on the type of real estate. If the assignment is made subsequent to the auction, a double transfer of ownership occurs.

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