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V3043-21 7 December 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Requirements for passive party investment in metro construction contracts

An engineering and programming company asks whether its services are subject to passive party investment in metro projects. The DGT explains that specific conditions regarding the nature of the contract and the project object must be met for this mechanism to apply.

The question raised

Whether the reverse charge rule provided for in Article 84.One.2º.f) of Law 37/1992 will apply to the service provisions to be carried out by the taxpayer.

The DGT's ruling

The reverse charge mechanism applies when works are executed, with or without materials, within the framework of urbanizations or the construction/rehabilitation of buildings. It does not apply if the services are limited exclusively to engineering and programming regarding elements that are not subject to installation or assembly by the taxpayer. In that case, the company must charge VAT on the invoice.

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