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A public commercial company inquired whether transferring the legal ownership of central markets to the City Council constitutes a supply of goods subject to VAT. The DGT ruled that, as the company retains the power of disposal for their exploitation, no supply of goods has occurred.
Question raised: Whether the transfer of legal ownership of the assets subject to inquiry to the City Council constitutes a supply of goods for the purposes of Value Added Tax.
The transfer of legal or formal ownership of public domain assets to the City Council is not a supply of goods if, in a single act, these are assigned to the company so that it may continue to manage and economically exploit them. As the power of disposal inherent to the owner is not transferred, the operation is instrumental and is excluded from the scope of application of VAT.
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