Transfer of the business (due to sale or death)
Transfer of the business by the business person
The status of business person or professional for the purposes of VAT is maintained until the effective cessation of the activity, which cannot be understood to have occurred while the liquidation of the business or professional assets and the sale of the assets assigned to the activity is carried out.Therefore, if the effective cessation has not taken place, you must continue to file the VAT self-assessments, and you can request a refund, if applicable, by filing form 303 for the fourth quarter of the year in which you cease the activity.If you are registered in the Monthly Refund Register, you can apply for the refund in the period in which the cessation occurs.
You must declare the VAT payments accrued as a result of the transfer or cessation of use of all or part of the business or professional assets to third parties, as well as the transfer of goods from the business assets to the private assets or consumption of the business person (self-consumption).The transfer of the entire business assets or of an autonomous economic unit is a transaction not subject to VAT.The acquirer is not required to continue to carry out the same activity as the transferor, but may carry out a different activity, provided that they prove their intention to keep the acquired assets used for the pursuit of a business or professional activity.Nor does it require the transfer of the property where the activity is carried out, if it is leased to the acquirer on a lasting basis.
They will have to file the annual VAT summary, form 390, for the year the activity ended.Finally, they must submit the corresponding tax registry declaration (form 036), filling in box 150, within one month of the cessation.
Transfer of the business by heir
On the death of the business person, outstanding tax liabilities are passed on to the heirs, or to the representative of the estate, as long as the estate has not been accepted.If there are goods delivered or services rendered by the deceased business person or professional that are pending invoicing and/or collection, it is the heirs (or estate) who must issue the outstanding invoices.
They will also be obliged to file a tax return (form 303) corresponding to all transactions carried out up to the date of death, and will be able to deduct any outstanding input VAT payments.The filing shall be made at the Delegation or Administration of the Tax Agency of the deceased's domicile and shall be carried out by the heirs.In addition, they must submit form 390, annual summary, from 1 to 30 January of the following year.There are exceptions, for example, if the only activity is the rental of urban real estate.The heirs will be obliged to present the corresponding tax registry declaration of deregistration derived from the death of the deceased within six months of the death.The declaration shall contain information on the identification of the successors.If the investment goods which were used in the activity were still in the period of regularisation of deductions (four years after the purchase);nine years for land or buildings) upon transfer to the heirs, they will have to make a single regularisation for the time of that period that remains open.If the entire business assets are transferred as an autonomous economic unit, the transaction is not subject to VAT, and the acquirer will be subrogated to the position of the transferor for the purposes of continuing the regularisation for the remaining time.However, the transfer of immovable property by a lessor who does not have a company organisational structure, is subject to VAT, notwithstanding any exemption that may be applicable and, where applicable, the waiver of the exemption.
Transfer of business
The transfer of a business premises is not subject to VAT if it is transferred with a set of elements that constitute an autonomous economic unit in the transferor capable of carrying out a business or professional activity by its own means (furniture, stock, client portfolio, staff, etc.).Otherwise, the transfer is a supply of services subject to VAT at 21%.The retailer in Equivalence surcharge will charge the tax, but will not have to settle and pay it.