Mixed-capital companies must pay ITPAJD when purchasing goods from private individuals

The legal nature of mixed-capital commercial companies has raised doubts regarding their treatment under the Transfer Tax and Documented Legal Acts Tax (ITPAJD). Recently, the General Directorate of Taxes (DGT) clarified that these entities cannot benefit from the exemptions reserved for the Public Administration when they acquire goods from private individuals.

What the DGT has resolved

The technical body has determined that the acquisition of a plot of land from a private individual is subject to the onerous transfer tax modality. This criterion is based on the nature of the acquiring entity: although these companies have participation from public entities, their constitution and operation are governed by private law.

As commercial companies, they do not hold the status of Public Administration or Institutional Administration. For this reason, they cannot apply the subjective exemption provided for in Article 45.I.A.a) of the Consolidated Text of the Law on Transfer Tax and Documented Legal Acts (TRLITPAJD).

What this means for you

If your company is a commercial company with public participation, the purchase of assets or real estate from private individuals entails a direct tax burden. You cannot invoke the status of your shareholders as a public entity to avoid paying ITPAJD in these operations.

This resolution confirms that the distinction between public law and private law is decisive for the application of tax benefits. The presence of state capital does not transform the legal nature of the company for tax purposes regarding this tax.

What should be done

It is necessary for mixed-capital companies to integrate the cost of ITPAJD into their asset acquisition budgets. Since the liability for the tax is a direct consequence of their legal nature, financial planning must contemplate this expense in all onerous transfers with private individuals. It is recommended to assess each acquisition operation under this criterion to avoid possible requests from the Administration.