The sale of properties intended for storage units may be subject to VAT if the exemption is waived

The nature of the transfer of real estate intended for storage services, such as storage units, has raised doubts regarding its treatment under Value Added Tax (IVA). The Dirección General de Tributos (DGT) has recently clarified the classification of these operations and the possibilities of applying the tax.

What the DGT has ruled

The DGT determines that the transfer of a property intended for storage units does not constitute an autonomous economic unit. This is because the operation does not include human factors or branding elements that would allow for the consideration that an organized activity is being transferred. Therefore, it is a mere transfer of goods.

In principle, the delivery of this property is considered a second delivery of a building, which is exempt from VAT pursuant to Article 20.One.22º of Law 37/1992. However, the ruling introduces a fundamental nuance: if the acquirer is a business owner entitled to the deduction, the selling community of property has the option to waive said exemption. In this scenario, the operation would become subject to VAT, and the acquirer would assume the status of the taxable person for the transaction.

What this means for you

This ruling has direct implications depending on the profile of the parties involved:

• For the sellers (community of property): They have the power to decide whether to maintain the exemption or waive it so that the operation is taxed via VAT, provided that the buyer can deduct said tax.
• For the acquirers (business owners): If the operation is subjected to VAT through the waiver of the exemption, the buyer will be able to apply the corresponding deduction, which alters the initial financial cost of the acquisition.
• For the classification of the operation: It is confirmed that the sale of these premises cannot be treated as a transfer of a business or economic unit, being limited to a delivery of goods.

What should be done

In an operation of this type, it is necessary to analyze the tax status of the acquirer. If the buyer is a business owner entitled to the deduction, waiving the exemption may be a relevant technical option for tax management. It is recommended to assess each particular case to determine whether the application of VAT proves beneficial for the cost structure of the transaction.