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V1773-22 27 July 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · no sujeción

Transfer of a going concern may be exempt from VAT if it constitutes an autonomous economic unit

A trader subject to the equivalence surcharge has requested a ruling on whether the transfer of her business is subject to VAT. The DGT has determined that if the transfer includes an organisational structure that allows the activity to be carried out using its own means, the transaction is not subject to the tax.

The question raised

1.) For the purposes of Value Added Tax, it is asked whether said transaction would be not subject to the Tax in accordance with the provisions of Article 7, number 1 of Law 37/1992 or, in the event that said non-subjectivity assumption does not apply, whether the aforementioned tax must be charged.

The DGT's ruling

The transfer of a set of tangible and intangible elements that constitute an autonomous economic unit is not subject to VAT. In this case, the transfer of inventory, furniture, social media presence, and customer portfolio appears to constitute a going concern. If the requirements for an economic unit were not met, the transaction would be subject to VAT, although the transferor would not be obliged to settle or pay the output tax due to being under the equivalence surcharge regime.

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