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V2470-17 3 October 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · transmisión de valores

VAT regulations govern the allocation of real estate under Article 314 of the LMV

A query was raised regarding whether VAT or Personal Income Tax (IRPF) regulations should apply when determining if a company's real estate is allocated to a business activity (to prevent tax avoidance). The Directorate-General for Taxes (DGT) ruled that VAT regulations must prevail.

The question raised

Whether the requirements for the business use of real estate for the purposes of applying Article 314 of the Recast Text of the Securities Market Law must be considered in accordance with the Value Added Tax regulations or the Personal Income Tax regulations.

The DGT's ruling

To interpret Article 314 of the Securities Market Law, which regulates the transfer of securities in indirect taxation, the VAT regulations must be applied rather than those of the Personal Income Tax. This is because the provision regulates taxation under VAT or ITPAJD, and for the sake of consistency, a common definition of business use must be applied to both indirect taxes.

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