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V4374-16 11 October 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · disolución de sociedad

Asset allocation upon company dissolution is subject to VAT unless it constitutes an autonomous economic unit

The taxpayer asks whether the allocation of assets to shareholders upon company dissolution is exempt from VAT. The DGT rules that these transactions are, in principle, subject to VAT, unless an autonomous economic unit is transferred.

The question raised

1.) Application of the non-applicability established in Article 7.1 of the Value Added Tax Law to dissolution and liquidation operations.

The DGT's ruling

The allocation of assets upon dissolution is a supply of goods subject to VAT, unless a set of elements constituting an autonomous economic unit capable of carrying out an activity by its own means is transferred. For non-applicability to operate, the transfer must include an organizational structure of production factors and the acquirer must intend to maintain said business use. If buildings are involved, the transfer could be subject to and exempt under Article 20.One.22 of the VAT Law.

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