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V3426-20 26 November 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · cesión obligatoria

Transfer of premises via compulsory assignment is subject to VAT if carried out by a business or professional

A City Council has enquired whether the transfer of premises (equipment) resulting from the compulsory assignment of urban development rights is subject to VAT. The DGT has ruled that the transaction is subject to the tax if the party making the transfer is acting as a business or professional in the course of their activity.

The question raised

Whether the transfer of said property is subject to Value Added Tax.

The DGT's ruling

The transfer of the premises is subject to VAT provided it is carried out by persons acting in the capacity of entrepreneurs or professionals in the course of their business. The non-taxability provided for in Resolution 2/2000 for mandatory transfers of land is not applicable to this case of transfer of premises. Therefore, the transaction is taxable if the person transferring the property acts as an entrepreneur or professional.

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