Application of the reverse charge mechanism, as referred to in Article 84.1.2.e third dash of the VAT Law, to the delivery of a real estate asset by its owner to another entrepreneur, which serves as a guarantee for a loan, in exchange for a price intended to fully or partially cancel said mortgage loan by the seller. Deliveries of real estate assets by their owner, serving as a guarantee for a loan, to another entrepreneur in exchange for a price intended to fully or partially cancel said mortgage loan, are not included in the cases of the reverse charge mechanism under Article 84.1.2.e, third dash of the VAT Law. In the case contemplated, there has been neither the delivery of the property in execution of the mortgage nor the delivery in exchange for the total or partial extinguishment of the debt, as the seller himself assumes the debt cancellation with part of the price received; the acquirer does not assume any obligation to cancel the debt, either in full or in part.
Source: audiconsultores-etlglobal.com
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