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V2446-20 16 July 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Buyer may become VAT liable if seller renounces exemption

A landlord renting property seeks to acquire another property for the same purpose and asks whether it may become VAT liable. The DGT responds that the seller may renounce the exemption from construction delivery, making the buyer liable for VAT.

The question raised

Reverse charge mechanism and deductibility of Value Added Tax incurred in the purchase.

The DGT's ruling

The seller of a building may waive the exemption for second and subsequent deliveries if the acquirer is a taxable person with the right to deduction. In this case, the reverse charge mechanism applies and the acquirer shall be the taxable person for the transaction. The acquirer may deduct the input VAT provided that the goods are used in taxable and non-exempt operations, such as the leasing of premises.

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