Purchasing a business is not subject to Transfer Tax but is subject to Stamp Duty

The acquisition of an economic unit, such as a tobacco shop or any other operating business, carries specific tax implications regarding Transfer Tax and Stamp Duty (ITPAJD). A recent resolution from the Directorate General of Taxes (DGT) delimits the scope of this tax in operations of this type.

What the DGT has ruled

The advisory body has determined that the transfer of an economic unit, when carried out by entrepreneurs or professionals in the exercise of their activity, is not subject to the onerous transfer tax modality. This means that the transfer of the business itself does not generate the obligation to settle this tax under that specific modality.

However, the resolution establishes a crucial distinction regarding the formalization of the operation. If the sale is formalized through a public deed and the object of the transaction is registrable in the Registry of Movable Property, the deed is subject to the tax under the Stamp Duty (AJD) modality. The DGT emphasizes that the tax obligation arises due to the registrable nature of the document, without it being necessary for the registration in the Registry to actually occur for the tax to arise.

What this means for you

If you are an entrepreneur or professional acquiring an economic unit, you must consider that the operation will not be taxed under transfer tax, which represents a saving in that modality. Nevertheless, you must foresee the fiscal cost derived from the variable rate of Stamp Duty (AJD) if the operation requires a public deed and is susceptible to registration in the Registry of Movable Property.

This criterion affects both the acquiring company and the natural person who formalizes the purchase of a business through a public document.

What should be done

When acquiring a business, it is necessary to:

• Identify if the economic unit subject to the transfer is registrable in the Registry of Movable Property.
• Evaluate the need to formalize the operation through a public deed.
• Calculate the impact of the variable Stamp Duty (AJD) rate on the acquisition budget.
• Assess each particular case with a specialist to determine the exact nature of the transferred assets.