C) Concept of business or professional activity
As initially noted, to be subject to VAT the delivery of goods or the provision of services must be carried out in the development of a business or professional activity.
The following are business or professional activities:
Those that involve the self-management of material and human production factors, or one of them, with the aim of intervening in the production or distribution of goods or services.
In particular, extractive activities, manufacturing, trade and provision of services, including crafts, agriculture, forestry, livestock, fishing, construction, mining and the exercise of liberal and artistic professions are considered to be such activities.
Business or professional activities are considered to have begun from the moment in which goods or services are acquired with the intention, confirmed by objective elements, of using them for the development of such activities.
The following are deemed to be carried out in the course of a business activity:
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Operations carried out by commercial companies, when they have the status of entrepreneur or professional.
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The transfers or assignments of use of assets that make up the business or professional assets, even when the activities cease.
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The services provided by Property Registrars in their capacity as liquidators of a Mortgage District Liquidation Office.
Example:
The leased premises form part of the lessor's business assets and its transfer, if carried out, would be considered to have been carried out in the course of the lessor's business activity.
The exercise of business or professional activities is presumed:
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When an establishment whose purpose is to carry out a commercial operation is advertised through circulars, newspapers, posters, signs displayed to the public or in any other way
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When performing operations requires contributing to the IAE .
The presumption admits proof to the contrary.
It is irrelevant whether the operations carried out during the activity are habitual or occasional, as well as the purposes or results pursued by the specific activity or operation, and they will be taxed even if they are carried out in favour of the partners, associates, members or participants of the entities that carry them out.
Example:
A city council organises a basketball game to raise funds for an alcoholism prevention campaign.
The sale of tickets by the City Council that entitle the person to attend the basketball game is considered to be carried out in the exercise of a business activity, without the destination to be given to the income or profits resulting from said activity being relevant for such purposes.
Entrepreneurs or professionals acting as such with respect to services provided to them by entrepreneurs or professionals not established in the territory of application of the Tax shall be deemed to be:
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Those who carry out business or professional activities simultaneously with other activities that are not subject to tax.
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Legal entities that do not act as entrepreneurs or professionals as long as they have been assigned a VAT NIF provided by the Spanish Administration.
Example:
A city council hires a French company to carry out a project on the implementation of renewable energy systems in its municipal area. The City Council will be considered an entrepreneur or professional with respect to the services provided by the French consulting firm only if it has a VAT NIF for having carried out a prior subject AIB . Otherwise, he/she will not be considered a businessman or professional.