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V2711-23 6 October 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Delivery of land in urbanisation process is VAT liable and subject passive investment does not apply

A company asks whether the transfer of a plot in urbanisation process, after having paid an option to buy, allows applying the subject passive investment due to a registry encumbrance of urban constraints. The DGT responds that the delivery is subject to VAT and that such encumbrance does not constitute a guarantee for applying the subject passive investment.

The question raised

Question posed: Whether the reverse charge mechanism of Value Added Tax provided for in Article 84.One.2º.e), third indent, of Law 37/1992, would be applicable to the future transfer.

The DGT's ruling

The granting of a call option constitutes a provision of services subject to VAT, independent of the subsequent delivery of the real estate. The delivery of land undergoing urbanization is subject to VAT, as it is neither rural land nor a plot ready for construction. The registration of the land's encumbrance for the fulfillment of urban planning duties does not allow for the application of the reverse charge mechanism provided for in Article 84.One.2º.e) of Law 37/1992.

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