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V2228-17 5 September 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · transmisión de valores

Transfer of shares in a real estate company is, in principle, exempt from VAT and Transfer Tax

A company has enquired whether the purchase of shares in a real estate firm on the secondary market is exempt from VAT and Transfer Tax (ITPAJD). The Directorate General for Tax (DGT) responds that, as a general rule, the transaction is exempt, unless it is proven that the purpose is to evade tax on the transfer of the underlying real estate assets.

The question raised

The taxpayer wishes to know the liability and, where applicable, the exemption from Value Added Tax, as well as whether the proposed transaction would be exempt from the Transfer Tax and Stamp Duty in accordance with the provisions of Article 314 of the Securities Market Law, or whether it would be excluded from said exemption by falling within the scope of application of paragraph 2 of the aforementioned provision.

The DGT's ruling

The transfer of securities is exempt from VAT and ITP/AJD pursuant to Article 314 of the TRLMV. However, if the intent is to evade the real estate transfer tax, the transaction shall be taxed as a transfer of real estate. The intent to evade is a question of fact that the Administration must prove, although there are cases where it is presumed if objective requirements regarding control or the contribution of real estate are met.

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