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V2795-17 30 October 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · no sujeción

Transfer of an autonomous economic unit may be exempt from VAT

A trader under the equivalent surcharge regime enquires about contributing their affiliated assets to a company. The DGT examines whether the transfer constitutes an autonomous economic unit, exempt from VAT, and its impact on inventory deductions and Form 347.

The question raised

1st Deduction of Value Added Tax from the tax incurred by the commercial company on the occasion of the contribution of stocks and whether said delivery must be documented in an invoice for its deduction.

The DGT's ruling

The transfer of a set of assets is not subject to VAT if they constitute an autonomous economic unit capable of carrying out an activity by its own means. If this condition is met, the acquiring company may deduct the VAT amount by applying the current rates to the market value of the stocks according to the inventory. In any case, the transferor must issue an invoice when delivering the elements to another entrepreneur. Regarding Form 347, the inquirer must include the transaction if it exceeds €3,005.06, as they are obliged to issue an invoice.

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