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V1032-16 15 March 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · no sujeción

No VAT due on the donation of an agricultural holding constituting an autonomous economic unit

An agricultural entrepreneur has enquired about the gratuitous transfer of her holding to her son. The DGT has ruled that the transaction is not subject to VAT if an autonomous economic unit is transferred, does not generate capital gains for Income Tax purposes if the requirements of the Inheritance and Gift Tax Law are met, and is subject to municipal capital gains tax.

The question raised

1. Application of the reduction provided for in Article 20.6 of the Inheritance and Gift Tax Law.

The DGT's ruling

The transfer of an agricultural holding is not subject to VAT if the set of transferred elements allows for the development of an autonomous economic activity. For Personal Income Tax purposes, there shall be no capital gain or loss if the requirements of Article 20.6 of the Inheritance and Gift Tax Law are met and the assets have been used for at least five years. The transaction is subject to the Tax on the Increase in Value of Urban Land.

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