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V2368-20 10 July 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

Transfer of a business may be outside the scope of VAT if elements constitute an autonomous economic unit

A query was raised regarding whether the acquisition of restaurant assets, excluding the premises to be leased separately, is subject to VAT. The DGT indicates that the transaction will be outside the scope of VAT if the transferred elements form an autonomous economic unit capable of carrying out the activity on its own.

The question raised

Subjectivity to Value Added Tax of the amount paid to the transferor of the business.

The DGT's ruling

For the transfer of elements of a business assets to be not subject to VAT, the set must constitute an autonomous economic unit capable of carrying out an activity by its own means. The fact that the premises are not transferred, but rather leased, does not prevent the application of non-subjectivity if the organizational structure of production factors is maintained. If such economic unity is not proven, the transfer shall be subject to the tax and each element shall be taxed independently.

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