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V2986-20 5 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · arrendamiento de bienes

Leasing of rural land for photovoltaic plants is subject to 21% VAT and involves no IRPF withholding

A query was raised regarding the VAT and IRPF treatment for the rental of rural land for the installation of a photovoltaic plant. The DGT determines that the transaction is subject to VAT at the standard rate and that the income is taxed as income from real estate capital without IRPF withholding.

The question raised

1) Regarding VAT, the inquiry concerns the obligation to register in the census of business operators, to file tax returns, to invoice said operation, and the applicable tax rate in this case.

The DGT's ruling

The lease of rural land for a photovoltaic plant is subject to VAT at 21% because the purpose is the installation of elements for a business activity. The lessor acquires the status of a business operator and must comply with invoicing obligations, tax returns, and registration in the tax censuses. For Personal Income Tax (IRPF), the income constitutes income from real estate capital and is not subject to withholding as it is rural land.

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