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V1822-14 9 July 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

Transfer of leased real estate without its own organisational structure is subject to VAT

A company has enquired whether the purchase of a leased office building and car parks constitutes an autonomous economic unit. The DGT has ruled that, as the management structure of the activity is not included, the transaction is subject to VAT or may be an exempt supply with the option to waive the exemption.

The question raised

Subjectivity to Value Added Tax regarding the transfer of the real estate property.

The DGT's ruling

The transfer of a leased real estate property does not constitute an autonomous economic unit if it is not accompanied by an organizational structure of material and human production factors. In the absence of such a structure, the transaction is subject to VAT. However, the delivery of the building could be exempt pursuant to Article 20.One.22 of Law 37/1992, allowing for the waiver of the exemption if the acquirer is a taxable person with the right to full deduction.

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