Doctrine by topic · DGT Observatory

Cooperation System: 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 11 rulings · 2014–2022

Current position

The Administration performing urbanization works under a cooperation system holds the status of a businessman. Owners acting as businessmen or professionals who intend to allocate the land to an economic activity are taxable persons under the reverse charge mechanism regarding assessments (derramas). To apply this rule, owners must expressly and reliably communicate their status to the City Council.

The DGT's position remains constant regarding the status of the Administration as a businessman and the taxability of assessments. Throughout the rulings, it has been specified that the owner's status as a businessman depends on their intention to allocate the land to an economic activity. The need for an express communication of said status to apply the reverse charge mechanism has been reinforced.

Turning points

6 September 2018 V2398-18

Clarifies that indemnities for deprivation of assets or compensations for excess allocation do not constitute consideration and are not subject to IVA (Value Added Tax).

Analysis based on 11 of 11 rulings with a stated position. Updated 28 September 2026.

Rulings on this topic

11

V2300-22 31 Oct 2022

Income tax and VAT on land transfers depend on economic activity and land status

SG de Impuestos sobre la Renta de las Personas Físicas

actividad económicapromoción inmobiliariaganancia patrimonialurbanizaciónsuelo urbanizable LIRPF — Ley 35/2006 del IRPF art. 27.1LIRPF — Ley 35/2006 del IRPF art. 33.1

Affects CompanyExpat · Non-residentIndividual

V0734-22 4 Apr 2022

Inversion of the passive party applies if property owners act as entrepreneurs

SG de Impuestos sobre el Consumo

inversión del sujeto pasivourbanización de terrenosejecución de obrasempresario o profesionalderramas LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5

Affects CompanyExpat · Non-residentIndividual

V2717-21 8 Nov 2021

Inversion of passive party applies to demolition and accessory projects in urbanisation

SG de Impuestos sobre el Consumo

inversión del sujeto pasivoejecución de obraurbanización de terrenoscontrato mixtosistema de cooperación LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5

Affects CompanyExpat · Non-residentIndividual

V2398-18 6 Sept 2018

Urbanisation compensation and economic payments for mandatory transfers are not subject to VAT

SG de Impuestos sobre el Consumo

aprovechamiento urbanísticosistema de cooperaciónindemnizacionescesión obligatoriaexcesos de adjudicación LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5

Affects CompanyExpat · Non-residentIndividual

V5162-16 29 Nov 2016

Levies for urbanisation via cooperation systems are subject to VAT and may allow reverse charge mechanism

SG de Impuestos sobre el Consumo

urbanización de terrenossistema de cooperacióninversión del sujeto pasivoderramasempresario o profesional LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5

Affects CompanyExpat · Non-residentIndividual

V5159-16 29 Nov 2016

Compensation for demolition or extinction of rights is not subject to VAT

SG de Impuestos sobre el Consumo

indemnizacionesexcesos de adjudicacióndefectos de adjudicaciónsistema de cooperaciónurbanización LIVA — Ley 37/1992 del IVA art. 4.1LIVA — Ley 37/1992 del IVA art. 5.1.a

Affects CompanyExpat · Non-residentIndividual

V2972-16 27 Jun 2016

Levies for urbanisation via cooperation schemes are subject to VAT and may allow for reverse charge mechanism

SG de Impuestos sobre el Consumo

urbanización de terrenossistema de cooperacióninversión del sujeto pasivoderramasempresario o profesional LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5

Affects CompanyExpat · Non-residentIndividual

V2101-15 8 Jul 2015

Urbanisation levies and the transfer of development rights are subject to VAT

SG de Impuestos sobre el Consumo

sistema de cooperaciónderramasderechos de aprovechamiento urbanísticoinversión del sujeto pasivourbanización de terrenos LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5

Affects CompanyExpat · Non-residentIndividual

V2245-14 2 Sept 2014

Enterprise owners must apply passive investor investment to urbanisation payments

SG de Impuestos sobre el Consumo

inversión del sujeto pasivourbanización de terrenosempresario o profesionalderramassistema de cooperación LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5.1.a

Affects CompanyExpat · Non-residentIndividual

V0786-14 21 Mar 2014

Reverse charge mechanism applies to urbanisation works carried out by a City Council

SG de Impuestos sobre el Consumo

inversión del sujeto pasivourbanización de terrenossistema de cooperaciónejecución de obraempresario LIVA — Ley 37/1992 del IVA art. 4LIVA — Ley 37/1992 del IVA art. 5.1.a

Affects CompanyExpat · Non-residentIndividual

V0784-14 21 Mar 2014

Reverse charge mechanism applies to urbanisation works via cooperation system

SG de Impuestos sobre el Consumo

inversión del sujeto pasivourbanización de terrenossistema de cooperaciónderramasempresario LIVA — Ley 37/1992 del IVA art. 4.unoLIVA — Ley 37/1992 del IVA art. 5.uno.a

Affects CompanyExpat · Non-residentIndividual

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