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V2716-14 10 October 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Adjudicatary of a land plot in foreclosure is liable for VAT on investment

A company asked whether acquiring a land plot through foreclosure constitutes an investment by the liable party. The DGT states that, as the land is buildable, the transaction is subject to VAT and the adjudicatary is the liable party.

The question raised

Appropriateness of applying the reverse charge mechanism provided for in Article 84.One.2.e) of Law 37/1992.

The DGT's ruling

The transfer of a plot of land through forced execution is subject to VAT if the property was used for the transferor's activity. As it constitutes a delivery in execution of a guarantee over real estate, the taxable person is the successful bidder pursuant to Article 84.One.2.e) of Law 37/1992. In this case, the successful bidder must submit the ordinary self-assessment in their own name.

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