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V0617-19 22 March 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · holding pura

Pure holding sale may be exempt from VAT and ITP/AJD

A foreign holding company asks whether the sale of shares in a Spanish entity is subject to VAT or ITP/AJD. The DGT determines that, as the holding does not carry out management activities, it is a pure holding and the transaction is not taxable.

The question raised

Question raised: Liability and, where applicable, exemption from Value Added Tax on the sale of the aforementioned shares or, where applicable, liability under the transfer of assets modality of the Transfer Tax and Documented Legal Acts Tax.

The DGT's ruling

The mere holding of shares does not constitute an economic activity, therefore the holding company is not a taxable person for VAT purposes. The transfer of securities is exempt from VAT and Transfer Tax/Stamp Duty, unless there is an intent to evade tax on the underlying real estate. If the real estate is used for business activities, the presumption of evasion does not apply. If the entity were not a business, the transaction would be taxed under Transfer Tax/Stamp Duty as an onerous transfer of assets.

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