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Construction: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 9 rulings · 2014–2026

Current position

The reverse charge mechanism applies when the recipient is an entrepreneur or professional and the operation is a works execution for urbanization, construction, or rehabilitation. There must be a direct contract with the developer or a subcontract derived from a main contract of that nature. The work must be integrated into the process of construction or rehabilitation of buildings for the mechanism to be applicable.

The DGT's position on the reverse charge mechanism has remained constant, focusing on the nature of the works execution and the contractual relationship. Recent rulings (V2291-21, V2071-24, and V5257-26) confirm that the mechanism requires the work to be part of a construction or rehabilitation process and that a specific contractual link must exist between the developer and the contractor.

Turning points

  1. V2291-21

    Specifies that the reverse charge mechanism requires the operation to be for urbanization, construction, or rehabilitation and to be a works execution derived from a contract between a developer and a contractor.

  2. V2071-24

    Clarifies that the mere delivery of machinery without installation does not constitute a works execution and, therefore, does not allow for the application of the reverse charge mechanism.

Analysis based on 9 of 9 rulings with a stated position. Updated 29 September 2026.

Rulings on this topic

9

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