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V2138-20 25 June 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · no sujeción

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

A query was raised regarding whether the transfer of a financial asset management branch to a Spanish subsidiary of a French group is exempt from VAT. The DGT clarifies that the transaction will not be subject to VAT if the transferred elements constitute an autonomous economic unit capable of conducting an activity on its own.

The question raised

Whether the transfer operation of the financial asset management business can be considered a non-subject operation for Tax purposes.

The DGT's ruling

For the transfer to be not subject to tax pursuant to Article 7.1 of Law 37/1992, the transferred elements must constitute an autonomous economic unit with an organizational structure of material and human production factors. The legal form of the acquirer or whether they carry out the same activity is irrelevant, provided that the allocation to the development of a business activity is maintained. Non-subjectivity applies regardless of whether the recipient is a subsidiary company or a branch.

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