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Practical Handbook VAT 2022

C) Concept of business or professional activity

As mentioned above, in order to be subject to VAT the supply of goods or services must be carried out in the course of a business or professional activity.

These are business or professional activities:

Those involving the self-management of material and human factors of production, or one or more of them, for the purpose of intervening in the production or distribution of goods or services.

In particular, this applies to extractive activities, manufacturing, trade and the provision of services, including crafts, agriculture, forestry, stockbreeding, fishing, construction, mining and the exercise of liberal and artistic professions.

Business or professional activities are deemed to commence from the moment the acquisition of goods or services is made with the intention, confirmed by objective elements, of using them for the pursuit of such activities.

They are understood to be carried out in the exercise of a business activity:

  • Transactions carried out by commercial companies, when they have the status of entrepreneur or professional.

  • Transfers or transfers of use of the assets making up the business or professional assets, including on the occasion of the cessation of the exercise of the activities.

  • The services performed by Land Registrars in their capacity as liquidators of a Mortgage District Liquidation Office.


The leased premises form part of the lessor's business assets and their transfer, if made, would be deemed to have taken place in the course of the lessor's business.

The exercise of business or professional activities is presumed:

  • Where an establishment for the purpose of any business operation is advertised by means of circulars, newspapers, posters, signs displayed to the public or in any other manner whatsoever

  • When operations require a contribution to be made to IAE.

The presumption is rebuttable.

It makes no difference whether the transactions in the exercise of the activity are of a regular or occasional nature, nor the purposes or results pursued by the activity or the specific transaction, and they will be taxed even if they are carried out for the benefit of the partners, associates, members or participants of the entities that carry them out.


A local council organises a basketball game to raise funds for an alcohol prevention campaign.

The sale of tickets by the City Council entitling the holder to attend the basketball match is considered to be carried out in the exercise of a business activity, and the use to which the income or profit resulting from such activity is to be put is irrelevant for this purpose.

Entrepreneurs or professionals shall be deemed to be entrepreneurs or professionals acting as such in respect of services supplied to them by entrepreneurs or professionals not established in the territory where the tax applies:

  • Those who carry out business or professional activities simultaneously with other activities that are not subject to tax.

  • Legal persons not acting as entrepreneurs or professionals, provided that they have been assigned a VAT number (NIF-IVA) supplied by the Spanish Administration.


A municipality contracts a French company to carry out a project on the implementation of renewable energy systems in the municipality.The municipality will be considered as an entrepreneur or professional in respect of the services provided by the French consultancy firm only if it has a VAT registration number (NIF-IVA) as a result of having carried out an AIB prior subject.Otherwise, he shall not be considered as an entrepreneur or professional.