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V3464-19 18 December 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Inversion of the passive party applies to subcontractor services in rail line construction

A subcontractor company asks whether the inversion of the passive party applies to construction services for a platform and rail line. The DGT confirms that it does apply if the services constitute construction works and are part of a building project (the rail line).

The question raised

Applicability of said reverse charge mechanism, given that the consultant considers it to be limited to providing services that do not constitute urban development, construction, or rehabilitation of buildings.

The DGT's ruling

The reverse charge mechanism under Article 84.One.2.f) of the VAT Law applies if the services provided by the subcontractor are considered as the execution of works. It is not necessary for the isolated services to be urban development or construction, provided that the work as a whole is classified as such. In this case, the railway line is considered a building, so its components (platform, track, etc.) constitute a construction work.

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