Skip to main content
VAT practical manual 2022.

B) Concept of companies or professionals

The delivery of goods or provision of services must be carried out by an entrepreneur or professional to be subject to VAT .

Entrepreneurs and professionals are defined in a specific way in the VAT. Thus, they have this consideration:

  • Those who carry out business or professional activities, unless they carry them out exclusively free of charge.

  • Commercial companies, unless proven otherwise.

  • Those who exploit a tangible or intangible asset in order to obtain continuous income over time. In particular, lessors of property.

  • Those who develop land, promote, construct or rehabilitate buildings intended for sale, award or transfer, even occasionally.

  • Individuals who occasionally carry out the delivery of a new means of transport exempt from tax because it is destined for another Member State of the European Union, who will be entrepreneurs only with respect to this operation.

The status of businessman or professional, in the cases referred to in the first four indents, exists for the purposes of VAT , from the moment goods or services are acquired with the intention, confirmed with objective elements, to allocate them to the development of the corresponding activities.


  • An individual who rents a garage or commercial premises that he owns becomes a businessman, for VAT purposes, and must charge and pay the Tax, as well as comply with the rest of the obligations that correspond to the taxpayers of this tax.

  • Three people who build a building with three homes for subsequent allocation as a habitual residence form a community of property that, for VAT purposes, will be considered a business owner.

  • The promoter of a home for own use is not considered a businessman since he does not intend the construction for sale, award or transfer.

  • A Public Limited Company that is going to engage in the activity of selling footwear and that acquires goods and services with the intention, confirmed by objective elements, of allocating them to said activity, has the status of businessman or professional from the moment it makes the aforementioned acquisitions, although has not yet carried out any footwear sales operation.

Qualification of the relationship between partner and company

The determination of whether it is a labor dependency relationship or a professional activity in the field of VAT must be based on a case-by-case analysis, based on the indications established by the jurisprudence of the CJEU (Cases C-235/85, C-202/90, C-355/06).

In the case of natural persons who provide their professional services to a company of which they are the majority partner, where both carry out a professional activity, the relationship between the partner and the company must be classified as employment (not subject to VAT). , if based on the conditions agreed between them it turns out that:

  • The professional is subject to the organizational criteria of the entity,

  • It does not receive a significant economic compensation linked to the results of its activity, and

  • The responsibility towards third parties belongs to the company.

(Queries from the General Directorate of Taxes V2166-15, V0086-16 and V0482-16).