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V3120-14 19 November 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IVA · servidumbre de paso

Creation of an easement over rural land is subject to VAT but exempt, and not subject to Corporation Tax withholding

A company has requested a ruling regarding the taxation of a monthly income paid for the creation of an aerial easement over land owned by a communal mountain community. The DGT has determined that the transaction is exempt from VAT and that the payments are not subject to Corporation Tax withholding.

The question raised

1. Taxation under Value Added Tax.

The DGT's ruling

The creation of rights in rem, such as an easement of way over land, is a transaction subject to VAT but exempt as it concerns rural property. Regarding Corporate Income Tax, income from the lease or transfer of rural real estate is not subject to withholding. Therefore, the entity owning the land must not charge VAT, nor should the consulting company apply withholding tax.

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