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V3028-20 8 October 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · cese efectivo de la actividad

Entrepreneur status and VAT liability maintained on asset transfers following tax census deregistration

A cooperative inquired whether it needed to re-register for tax purposes to transfer its assets after deregistering from the business census. The DGT ruled that entrepreneur status is not lost through mere census formalities if there is no effective cessation of activity, meaning such transfers remain subject to VAT.

The question raised

Obligation to re-register in the census of entrepreneurs, professionals, and withholding agents, as well as the liability for Value Added Tax on the described transfers.

The DGT's ruling

The loss of entrepreneur status for VAT purposes does not occur upon the submission of the deregistration form if the effective cessation of activity has not taken place, as occurs when the business assets have not yet been liquidated. Therefore, the entity maintains its status as a taxable person and must fulfill its tax obligations without the need for a new registration. The transfers of assets, such as the aforementioned premises, shall be subject to VAT, and the exemption for second-hand building transfers or the waiver thereof may apply.

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