Skip to main content
Practical manual VAT 2024.

Delimitation with the concept of capital transfers for valuable consideration of the Tax on Capital Transfers and Documented Legal Acts

1. General rule

Both taxes tax the transfer of assets or rights. VAT is applied when the transferor is a businessman or professional, and the concept "Onerous Asset Transfers" is applied when the transferor is an individual.

Example:

A second-hand car purchased from a dealer will be taxed by VAT that the dealer must pass on to the buyer. On the other hand, if the purchase is made from a private individual, the tax that the purchaser must pay is the Tax on Property Transfers and Documented Legal Acts.

A fundamental difference between both taxes is the possibility of deducting VAT when it is borne by a businessman. While the amounts paid for the concept "Onerous Asset Transfers" constitute a cost for the businessman, VAT is not, since it can be deducted in the corresponding self-assessment.

As a general rule, the incompatibility of both taxes occurs so that, in principle, the operations carried out by businessmen and professionals in the exercise of their business or professional activity will not be subject to the concept "Onerous Asset Transfers" of the Tax on Asset Transfers and Documented Legal Acts, but VAT.

2. Exceptions

The exceptions to the general rule are operations that, being carried out by entrepreneurs or professionals, are subject to the concept of "Onerous Property Transfers" of the Tax on Property Transfers and Documented Legal Acts.

We can make the following classification:

  1. Operations carried out by businessmen or professionals subject to and exempt from VAT :

    The deliveries, leases, constitution or transmission of real rights of enjoyment or enjoyment over real estate, unless the VAT exemption is waived.

  2. Operations carried out by businessmen or professionals not subject to VAT:

    The transfer of real estate that is included in the transfer of a set of tangible and, where appropriate, intangible elements that, forming part of the business or professional assets, constitute an autonomous economic unit in the transferor, capable of developing a business or professional activity by its own means.

The Tax Agency has made available to taxable persons a virtual VAT assistance tool called « Real Estate Operations Qualifier », with the purpose of determine the taxation of real estate sales and leasing operations by VAT or ITP , who is the person who must pay the tax and if the invoice includes VAT.