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V2427-14 15 September 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · expropiación forzosa

Expropriation of land may be subject to VAT if developed or buildable, and the tax is not included in the fair price

The inquiry asks whether the expropriation of a property is subject to VAT and if this must be included in the fair price (justiprecio). The DGT indicates that the exemption depends on the status of the land and that VAT must be charged separately from the compensation value.

The question raised

Question raised 1.-Taxability of the aforementioned sale and purchase under Value Added Tax and, where applicable, exemption therefrom.

The DGT's ruling

The exemption for rural land does not apply if the owner is a developer or if the land is undergoing development or is buildable. If the transfer is taxable, VAT must not be understood as included in the fair price, as this must represent the real economic equivalent of the asset without diminishing the assets of the expropriated party. Therefore, the taxable person must charge the tax independently.

Apply this to a real case

What is published here, applied to a company or a specific case. The first meeting is free.

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