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V3822-15 2 December 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Delivery of property via urbanisation may be exempt; demolition compensation not subject to VAT

A non-profit entity asks about VAT treatment in property delivery as urbanisation payment, the investor's investment, and the taxation of demolition compensation. The DGT determines the entity is a trader, assesses possible exemption for land, and concludes that compensation is not a service payment.

The question raised

1.- Application of the reverse charge mechanism provided for in Article 84.One.2º f) of Law 37/1992.

The DGT's ruling

The entity holds the status of a trader by performing onerous activities, and must communicate its status so that the reverse charge mechanism applies to the taxpayer regarding urbanization levies. The delivery of land as payment for urbanization is a taxable operation, but it could be exempt if the land is rural or intended for public parks and gardens. Indemnities for the demolition of buildings do not constitute consideration for services and, therefore, do not form part of the tax base.

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