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V2958-20 30 September 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derechos de aprovechamiento

Transfer of land and development rights may be subject to or exempt from VAT depending on urbanisation status

A company has requested clarification on whether exchanging land for urban development rights with a local council is subject to VAT. The DGT explains that VAT liability depends on whether the land is rural, undergoing urbanisation, or is buildable, as well as the timing of the tax accrual.

The question raised

Whether such deliveries are subject to Value Added Tax. If applicable, the accrual and the taxable person for the Tax.

The DGT's ruling

The delivery of rural land is exempt, but if the transferor has incurred physical transformation costs, it is considered land under urbanization and is subject to VAT. Building land or plots do not benefit from the exemption. Development rights are considered deliveries of goods, and the tax accrual occurs when they are made available to the acquirer (following replotting) or at the time of advance payment.

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