Skip to content
Back to index
V2723-20 4 September 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

Property transfers with subrogation in management contracts may be exempt from VAT

An real estate entity asks whether property contributions from its subsidiaries during a restructuring are subject to VAT. The DGT responds that if properties are transferred together with the organisational structure necessary to form an autonomous economic unit, the transaction is not subject to VAT.

The question raised

Whether the contributions received by the consulting entity from the entities owning the real estate within the framework of said business restructuring process would be subject to Value Added Tax.

The DGT's ruling

For the transfer of a set of elements not to be subject to VAT, these must constitute an autonomous economic unit capable of carrying out an activity by its own means at the transferor's premises. In this case, the transfer of real estate assets together with the subrogation in the real estate management contract allows for the consideration that the necessary organizational structure of production factors exists. However, if the transfer is carried out without such structure or essential elements are omitted, the operation shall be subject to the tax.

Book your free first meeting