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V1986-20 17 June 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · empresario

Vehicle sales by a company may be subject but exempt from VAT and not subject to IPT

An individual has enquired whether the sale of a vehicle to a limited company is subject to VAT or Transfer Tax (IPT). The DGT has ruled that if the company is a business entity and did not deduct the VAT upon purchase, the supply will be subject but exempt from VAT and will not be subject to IPT.

The question raised

Liability of the aforementioned transfer to Value Added Tax or to Transfer Tax and Stamp Duty.

The DGT's ruling

If the transferring entity is a business person and was not allocated the right to a total or partial VAT deduction upon acquiring the vehicle, the supply shall be subject to but exempt from VAT. As the operation is subject to VAT (even if exempt), the transfer shall not be subject to Transfer Tax and Stamp Duty.

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