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V4737-16 10 November 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · unidad económica autónoma

Transfer of a going concern may be exempt from VAT and taxed under IRPF depending on the asset type

A jeweller seeks clarification on the taxation of a business sale (stock, furniture, and equipment). The DGT indicates that the transfer of an autonomous economic unit is not subject to VAT, whereas for IRPF purposes, stock is taxed as business income and fixed assets as capital gains.

The question raised

Taxation of the sale of a business for Personal Income Tax (IRPF) and VAT purposes.

The DGT's ruling

The transfer of a set of assets constituting an autonomous economic unit capable of carrying out an activity by its own means is not subject to VAT. For Personal Income Tax (IRPF), the sale of inventory generates income from economic activity included in the general base. On the other hand, the transfer of tangible or intangible fixed assets generates a capital gain or loss that is included in the savings base.

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