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V2816-18 26 October 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

Transfer of an autonomous economic unit is not subject to VAT

A branch of a UK entity is to transfer its assets (tangible, intangible, and human resources) to another entity within the group to continue the same activity. The DGT rules that this transaction is not subject to VAT as it constitutes an autonomous economic unit.

The question raised

Subjectivity of the operation to Value Added Tax.

The DGT's ruling

The transfer of a set of tangible and intangible elements constituting an autonomous economic unit capable of carrying out an activity by its own means in the transferor is not subject to VAT. In order not to be a mere assignment of assets, the transfer must be accompanied by an organizational structure of material and human production factors. In this case, as the know-how, client portfolio, contractual relationships, and personnel are transferred, the requirements for non-subjectivity are met.

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