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Practical manual VAT 2024.

Frequently asked questions raised in this chapter

Taxation by VAT or by the concept of onerous property transfers of the Tax on Property Transfers and Documented Legal Acts of the following operations:

1. A businessman sells old furniture for renovation purchased 8 years ago.

The delivery is subject to Value Added Tax when carried out by a business person in the course of his or her activity.

2. What if the seller is an educational center?

We are dealing with a delivery of goods that is not subject to either tax:

  • It does not pay taxes on property transfers because it is carried out by a businessman.

  • It is not taxed by VAT because it is one of the operations declared exempt by the VAT Law, as the goods have been used in exempt operations that do not generate the right to deduct the input VAT (article 20.One.24.º of the VAT Law). VAT).

3. What if a businessman who is not a real estate developer sells a flat to a private individual for housing?

The delivery is taxed, by exception, for property transfers:

  • It is not taxed by VAT because it is one of the operations declared exempt by the VAT Law as it is a second or subsequent delivery of buildings.

  • It is taxed under the concept of onerous property transfers, even if it is carried out by a businessman.

4. Buying a used typewriter from a store or directly from a private individual. What tax must be paid?

  • If purchased in a store, VAT must be paid to the merchant.

  • If purchased from a private individual, the Tax on Onerous Property Transfers must be paid.

5. How is the contribution of machinery affected by a business activity made by a partner to a company, receiving the corresponding shares in exchange, taxed?

  • The delivery of the machinery is subject to Value Added Tax as the contributor is a businessman and forms part of his business assets.

  • If applicable, you will also be subject to corporate transactions tax on asset transfers and documented legal acts, if there is a creation or increase in capital or a contribution by partners to replace losses.