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An entity has enquired whether the transfer of a plot of land, where the transferor uses part of the consideration to discharge a mortgage, allows for the reverse charge mechanism to be applied. The DGT has ruled that it does, provided that the property is subject to a security interest and the acquirer is a businessperson or professional.
Question posed: Admissibility of applying the reverse charge mechanism to the transfer of plots of land as provided for in Article 84.One.2.e), third indent of Law 37/1992
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