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V2273-24 24 October 2024 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Transfer of rural land with irrigation shed to REAGP buyer: exempt from VAT, no renunciation possible, subject to ITP

A physical person under the special REAGP regime acquires rural land with an irrigation shed from a company and asks whether the transfer is VAT-exempt, whether renunciation is possible, and whether the passive taxpayer's investment applies. The DGT concludes that the transaction is exempt under Article 20.1.20 of the VAT Law, renunciation is not possible because the buyer cannot deduct REAGP contributions, and the passive taxpayer's investment does not apply, thus the transaction is subject to ITP.

The question raised

Question raised: It seeks to determine whether any exemption provided for in the Value Added Tax Law can be applied to the aforementioned transfer operation, as well as whether, in such a case, the exemption could be waived, and whether the reverse charge mechanism would be applicable.

The DGT's ruling

Art. 20.One.20 LIVA exempts the supply of non-buildable rural land with constructions indispensable for agricultural exploitation. The waiver of the exemption under art. 20.Two LIVA requires that the acquirer has the right to a total or partial deduction of the VAT incurred; an acquirer under the REAGP cannot practice any deduction due to the application of art. 130 LIVA, and therefore does not meet the waiver requirement. The reverse charge mechanism of the taxable person under art. 84.One.2.e LIVA only applies when the exemption has been waived, which is not the case here.

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