Skip to content
Back to index
V3048-23 23 November 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · arrendamiento de terrenos

Leasing of land for solar farms and the granting of call options are subject to VAT

A renewable energy company has requested a ruling on the VAT treatment of land leases and the establishment of call options. The DGT has determined that leases intended for the installation of business activity assets are not exempt and that the call option constitutes a taxable supply of services.

The question raised

Whether such leases would be subject to Value Added Tax. Whether the establishment of purchase options and, where applicable, their subsequent exercise would be subject to Tax.

The DGT's ruling

The leasing of land for the installation of business activity elements, such as solar panels, does not benefit from the exemption provided in Article 20.One.23 of Law 37/1992. The granting of a purchase option on real estate is a service subject to VAT at 21%, taxable at the time of its establishment. The accrual of the purchase option occurs when the right is granted, regardless of whether it is paid in installments or exercised.

Book your free first meeting