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V2939-21 19 November 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Investment of passive subject applicable in property transfer by debt subrogation

The consultant asks whether acquiring property through debt subrogation allows the application of passive subject investment and whether invoices for advances must be corrected if this mechanism was not applied. The DGT responds that the investment applies if the buyer is a business operator and the property is used in their activity, and that corrections are required if the investment mechanism was incorrectly applied.

The question raised

Whether the reverse charge mechanism provided for in the Value Added Tax Law shall apply to the aforementioned operations and, if so, whether corrective invoices should be issued if said invoices were issued without the application of the aforementioned mechanism.

The DGT's ruling

The reverse charge mechanism applies to the taxpayer in the case of the delivery of real estate in exchange for the discharge of the guaranteed debt or the obligation of the acquirer to discharge it, provided that the recipient is a business or professional and the real estate is used for their activity. In the case of advances, the tax is accrued at the time of collection. If the reverse charge was not applied when due, the tax liability must be rectified by means of a corrective invoice at the time the error is detected, within a period of four years.

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