Back to index
V0585-24 9 April 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IVA · arrendamiento de industria

Leasing of livestock business subject to 21% VAT rather than Transfer Tax (ITP)

A self-employed individual inquired whether the leasing of a poultry breeding business is subject to VAT or Transfer Tax (ITP), and whether Corporate Tax withholding applies. The Directorate General for Tax (DGT) ruled that the leasing of an industry is subject to VAT at 21% and, as it is subject to VAT, it is not liable for Transfer Tax.

The question raised

Whether the rents payable to the lessor under the contract are subject to VAT and, in the event they are not, to confirm whether they would be subject to the Transfer Tax (ITP) in its onerous transfer of assets aspect.

The DGT's ruling

The leasing of an industry or business for livestock farming activities constitutes a provision of services subject to VAT at the general rate of 21%. As it is an operation subject to VAT, it is not subject to the onerous transfer of assets modality of the Transfer Tax (ITP). In order to avoid withholding under Corporate Income Tax, the lease must be an industry lease (a patrimonial unit with its own independent existence) and the lessor company must carry out said activity as an economic activity with its own organizational structure.

Book your free first meeting