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V3186-21 23 December 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Supply of equipment without installation excludes passive investment

A manufacturer of automation equipment and control panels asks whether its activities are subject to passive investment. The DGT determines that, since no installation or assembly is carried out, its deliveries of goods do not constitute works and must be VAT charged.

The question raised

It is questioned whether the reverse charge mechanism provided for in Article 84.One.2º f) will apply to the operations carried out by the applicant.

The DGT's ruling

The reverse charge mechanism for the taxpayer requires that the contract be of a works execution nature, including the supply of goods intended for installation and assembly. The supply of materials that are not subject to installation and assembly is not considered a works execution. Therefore, the supply of equipment without installation does not allow for the application of the reverse charge mechanism, and VAT must be charged on the invoice.

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