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V1178-16 23 March 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · actividad empresarial

Sale of artwork may be subject to VAT if a separate business activity of buying and selling is established

A healthcare company purchased a work of art for resale and sought clarification on its tax treatment. The DGT ruled that if the acquisition is made with the intent to sell, it initiates a business activity of buying and selling that constitutes a separate sector, making the supply subject to VAT.

The question raised

Taxation of the delivery of the artwork.

The DGT's ruling

If the acquisition of the artwork is carried out with the intention of intending it for sale, a business activity is considered to have commenced. This activity constitutes a separate sector from the previous healthcare activity. The delivery of the work shall be subject to VAT, and the special regime for second-hand goods or works of art may be applied if the status of reseller is held. The general rate is 21%, unless the reduced rate of 10% is applied according to the regulations.

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