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V0752-20 7 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

Transfer of a business branch with its own structure may be exempt from VAT

A company sought clarification on whether the transfer of one of its three business branches (vehicle trade and repair) was subject to VAT. The DGT ruled that, as it possesses its own organisation of human and material resources, it constitutes an autonomous economic unit and is therefore not subject to the tax.

The question raised

Subjectivity of said transfer to Value Added Tax.

The DGT's ruling

The transfer of a set of tangible and intangible elements constituting an autonomous economic unit capable of carrying out a business activity is not subject to VAT. For non-subjectivity to apply, the transfer must be accompanied by an organizational structure of material and human production factors. In this case, the assignment of the trademark, furniture, spare parts, goodwill, and the transfer of the workforce allow the transfer to be considered an autonomous economic unit.

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