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V2532-24 10 December 2024 · SG de Impuestos sobre el Consumo Criterion in force
IVA · concesión administrativa

UTE transfers administrative concession freely to affiliated entity: transaction deemed self-consumption at 21% VAT rate

A UTE holding an administrative concession to build and operate a planetarium transfers it freely, prior to any action, to a commercial company with the same shareholders. The DGT concludes that the transfer of the concession does not constitute an autonomous economic unit (not covered by Article 7.1 of the VAT Law), that the transfer of concessions is subject to VAT (non-application of Article 7.9 applies only to grant), and that, being free and transferred to an affiliated entity, it is classified as self-consumption of services (Article 12.3 of the VAT Law) taxable at 21%. The taxable base is determined under Article 79.5 of the VAT Law (market value by affiliation) or Article 79.4 (cost of service provision).

The question raised

Question posed: Whether said transfer is subject to Value Added Tax. In particular, the taxable base of the Tax.

The DGT's ruling

The non-applicability of art. 7.1 LIVA requires that the transferred assets constitute an autonomous economic unit with an organizational structure of material and human resources; the transfer of a concession alone, without further means, is a mere transfer of rights subject to VAT. The non-applicability of art. 7.9 LIVA applies to the granting of the concession but not to its subsequent transfer. The gratuitous transfer to a related entity that does not pursue purposes inherent to the activity constitutes self-consumption of services (art. 12.3 LIVA), taxable and not exempt, at the general rate of 21%. The taxable base shall be the market value (art. 79.5) if the requirements of relatedness are met, or the cost of provision (art. 79.4) otherwise.

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