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V0240-15 21 January 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

Transfer of real estate management activity subject to VAT if sufficient autonomy is lacking

A company has enquired whether the transfer of its real estate and credit management activity constitutes an autonomous economic unit, thereby exempting it from VAT. The Directorate-General for Taxes (DGT) has ruled that the transaction is subject to VAT because the buyer lacks the real autonomy required to carry out the activity.

The question raised

Application of the non-subjectivity assumption of Article 7.1 of Law 37/1992 to said operation.

The DGT's ruling

For the transfer of a set of elements to be an operation not subject to VAT, the elements must constitute an autonomous economic unit capable of carrying out an activity by its own means. In this case, the buyer lacks sufficient autonomy as they are subject to operational instructions from the transferor, follow pricing policies set by them, use their network of offices, and are obliged to use their same suppliers and advisors.

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