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V3364-15 2 November 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · patrimonio público del suelo

Sale of urban plots by a local council subject to VAT as part of its business activity

A local council has requested clarification on whether the auction of two municipal building plots is subject to VAT. The Directorate-General for Taxes (DGT) has ruled that the management of municipal land assets constitutes a business activity and, as these are building plots, the exemption for non-buildable land does not apply.

The question raised

Liability for Value Added Tax.

The DGT's ruling

The sale of plots integrated into the municipal land assets constitutes a business management activity. As these are urban buildable plots, the exemption under Article 20.One.20º of Law 37/1992 does not apply. Therefore, the transaction is subject to VAT at the general rate of 21 percent.

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