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V2398-14 11 September 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IVA · devengo

VAT accrual in construction works varies depending on the recipient and the nature of the work

A construction company seeks clarification on when VAT should accrue when issuing monthly work certifications, particularly when dealing with Public Administrations. The DGT clarifies that the timing of accrual depends on the type of client and the nature of the construction work.

The question raised

1. At what moment does the VAT accrual occur, pursuant to the provisions of Article 75 of Law 37/1992, in the case of both individuals and public administrations. In the latter case, if from the monthly certificates, as there is no receipt of work until its completion, does accrual occur when the public administration pays before the receipt of the work or at the moment the invoice is delivered with the monthly certificate of work executed.

The DGT's ruling

If the recipient is a Public Administration, VAT is accrued at the time of the total or partial receipt of the works. For recipients that are not Public Administrations, accrual occurs when the goods are made available to the owner (in works involving materials) or when the operations are executed (in works without materials). Advance payments accrue the tax at the time of collection. The issuance of work certificates does not determine accrual by itself, unless they constitute an advance payment.

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