Back to index
V0363-22 24 February 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

Transfer of an autonomous economic unit is not subject to VAT if human and material resources are transferred

A company has requested a ruling on whether the transfer of a management support business unit is subject to VAT and the implications if the subrogation of personnel is judicially annulled. The DGT ruled that the transaction is not subject to VAT if an autonomous economic unit with a structure of production factors is transferred; however, if personnel are not transferred, the transaction is treated as a mere transfer of assets subject to tax.

The question raised

Liability for Value Added Tax regarding the transfer carried out by the applicant and, where applicable, the consequences arising from the declaration of nullity of the labor transfer by judicial sentence.

The DGT's ruling

The transfer of elements constituting an autonomous economic unit capable of carrying out an activity by its own means is not subject to VAT. For this requirement to be met, there must exist an organizational structure of material and human production factors. If personnel are not subrogated by judicial resolution, the operation would cease to be an economic unit and become a mere transfer of assets subject to tax, requiring the rectification of issued invoices. In the case of real estate, the transfer could be subject to tax or exempt if they are subsequent deliveries of buildings.

Book your free first meeting