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V3110-15 16 October 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
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The contribution of a leasing business line may qualify for the special Corporate Income Tax regime and not be subject to VAT

A real estate development company inquires whether the contribution of its leasing business line may apply the special Corporate Income Tax regime and whether the transaction is exempt from VAT. The DGT determines that the transaction meets the requirements for the special Corporate Income Tax regime and is considered a transfer of an economic unit not subject to VAT.

The question raised

Question raised 1) Whether the described operation of the contribution of the leasing business line may qualify for the special tax regime of Chapter VII of Title VII of Corporate Income Tax Law 27/2014, of November 27.

The DGT's ruling

For Corporate Income Tax purposes, the contribution of a business line may apply the special regime if the assets constitute an autonomous economic unit capable of operating by its own means. In this case, the economic reasons of reorganization and rationalization are valid under Article 89.2 of the Corporate Income Tax Law. Regarding VAT, the transfer of an autonomous economic unit, composed of assets, liabilities, and personnel, is not subject to the tax pursuant to Article 7.1 of the VAT Law.

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