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V3194-21 23 December 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · unidad económica autónoma

The contribution of assets and rights from a branch of activity is subject to VAT if it does not constitute an autonomous economic unit

A company inquires whether the non-monetary contribution of a branch of activity (caravan rental) to a new company may qualify for VAT non-applicability. The DGT responds that, as it does not include an organizational structure of production factors that allows for the development of an autonomous economic activity, it is considered a mere transfer of assets subject to the tax.

The question raised

Question posed: It is questioned whether the contribution of the branch of activity described in the inquiry may qualify for the exemption provided for in Article 7, paragraph 1 of Law 37/1992, of December 28, on Value Added Tax.

The DGT's ruling

For the transfer of tangible and intangible elements to be exempt from VAT, they must constitute an autonomous economic unit capable of carrying out an activity by its own means. The mere transfer of assets, without an organizational structure of material and human production factors, is excluded from non-applicability. In this case, the transfer of material assets and contractual subrogations does not amount to forming an autonomous economic unit, therefore the operation is subject to the tax.

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