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V4107-15 21 December 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · no sujeción

Transfer of a restaurant business exempt from VAT if it constitutes an autonomous economic unit

An entity inquired whether the transfer of its entire restaurant to a company was exempt from VAT. The DGT ruled that the transaction is not subject to the tax if the transferred elements form an autonomous economic unit capable of carrying out the activity on its own.

The question raised

1. Application of the non-subjectness assumption to Value Added Tax provided for in Article 7.1 of Law 37/1992.

The DGT's ruling

The transfer of a set of tangible and intangible elements shall not be subject to Tax if they constitute an autonomous economic unit capable of carrying out a business activity by its own means. In the case of a hospitality business, if it is transferred together with all the personal and material elements necessary for its operation, the transfer shall be non-subject pursuant to Article 7.1 of Law 37/1992. If these requirements are not met, the transfer shall be taxed according to the general rules.

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