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V3019-14 5 November 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Inversion of the passive party applicable to café installation and fitting

A company asked whether installing a café (with materials, machinery and furniture) for a real estate developer allows the application of the passive party's investment. The DGT confirms this is possible if the installation and fitting result in a tangible outcome, not merely the delivery of goods.

The question raised

Question posed: Applicability of the reverse charge mechanism provided for in Article 84.One.2.f) of Law 37/1992 to the operations carried out by the consulting entity.

The DGT's ruling

The reverse charge mechanism applies when the recipient is a businessperson or professional and the operation constitutes a construction or renovation work contract. The supply of goods with installation and assembly is considered a construction work contract if the activity goes beyond the mere making available of the goods and the company undertakes to achieve a specific result. In this case, as it is a contract with a developer for a building, the requirements of Article 84.One.2.f) of Law 37/1992 are met.

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