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V2087-19 8 August 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · unidad económica autónoma

Sale of pig farm subject to Corporate Tax and VAT status depends on whether it constitutes an economic unit

A company has requested a ruling regarding the taxation of the sale of a complete pig farm (including facilities, real estate, and licences). The DGT indicates that the income will be included in the Corporate Tax taxable base and that VAT exemption will depend on whether the transferred assets constitute an autonomous economic unit.

The question raised

Taxation of the transaction for the purposes of Corporate Income Tax, Personal Income Tax, VAT, and Transfer Tax and Documented Legal Acts Tax.

The DGT's ruling

In Corporate Income Tax, the income obtained shall be included in the entity's taxable base. Regarding VAT, the transaction shall not be subject to tax if the transferred elements constitute an autonomous economic unit capable of carrying out an activity by its own means. If such an organizational structure is not proven, the transfer shall be subject to VAT, with each element being taxed independently. In ITPAJD, if the transfer of real estate is not subject to VAT, it shall be taxed under the modality of onerous transfers of assets.

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