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V1351-18 23 May 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · no sujeción

Asset transfers exempt from VAT if they constitute an autonomous economic unit

A hospitality company has requested clarification on whether the transfer of part of its assets to another entity is subject to VAT. The DGT indicates that the transaction will not be subject to VAT if the transferred elements form an autonomous economic unit capable of carrying out an activity on its own.

The question raised

Whether the asset transfer transaction is subject to Value Added Tax.

The DGT's ruling

The transfer of a set of tangible and intangible elements shall not be subject to VAT if they constitute an autonomous economic unit within the transferor, capable of carrying out a business activity by its own means. For non-applicability to exist, the transfer must be accompanied by an organizational structure of material and human production factors, or one of them. If the transfer of assets is insufficient to carry out the activity, the transaction shall be subject to the tax and each element shall be taxed independently.

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