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V0554-20 9 March 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

Transfer of an autonomous economic unit is not subject to VAT

A British entity inquired whether the transfer of all assets from its Spanish branch to a new company constitutes a transaction not subject to VAT. The Directorate General for Taxes (DGT) ruled that, as all assets, liabilities, and the organisational structure are transferred, the criteria for non-subjectivity are met.

The question raised

Liability for Value Added Tax on the deliveries subject to consultation and, in particular, whether the non-liability assumption established in Article 7.1 of Law 37/1992 is applicable.

The DGT's ruling

The transfer of a set of tangible and intangible elements that constitute an autonomous economic unit capable of carrying out an activity by its own means is not subject to VAT. For this to occur, the elements must be sufficient to allow the development of an autonomous economic activity at the premises of the transferor. In this case, as assets, liabilities, contracts, and personnel are included, it is considered that the necessary organizational structure exists.

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