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V1599-18 8 June 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

Transfer of a photovoltaic installation may be exempt from VAT if it constitutes an autonomous economic unit

The applicant inquired whether the acquisition of a photovoltaic energy installation is subject to VAT or Transfer Tax (ITP). The DGT ruled that exemption from VAT depends on whether the installation constitutes an autonomous economic unit within the transferor's business, whereas the installation is considered real estate for Transfer Tax purposes.

The question raised

Liability of the transaction for Value Added Tax and, where applicable, for Transfer Tax on Onerous Transfers, whether the acquisition is made directly or through a company.

The DGT's ruling

For the transfer to be exempt from VAT, the elements must constitute an autonomous economic unit capable of carrying out an activity by its own means within the transferor. If it is not accompanied by an organizational structure of production factors, the transfer shall be subject to VAT for each individual element. Regarding Transfer Tax (ITP), the photovoltaic installation is considered real estate. Taxation under ITP will depend on whether the transferor is a taxable person for VAT purposes and whether the transaction is subject to said tax.

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