Transfer of business activity, residence and others
How to obtain import duty and tax exemption for professionals and individuals
Relocation of residence. Tax relief and exemptions
Goods and personal effects imported by natural persons who transfer their normal residence to the customs territory of the European Union from a third country will be admitted free of import duties and tax exemption.
For the purposes of applying the corresponding franchise, the following are considered personal property and effects and furniture:
- Those intended for the personal use of the interested parties or for their home needs (furniture effects and objects, household linen, etc.)
- The provisions that correspond to a normal family provision, the domestic animals that can live in the home, as well as the portable instruments of mechanical or liberal arts necessary for the exercise of the profession of the interested party. In no case should personal assets have, due to their nature or quantity, any commercial claim.
- Bicycles and mopeds, motor vehicles for private use and their trailers, camping caravans, boats for pleasure and private use and tourist planes, also for private use.
The requirements established in Regulation 1186/2009 on franchises and in the regulations governing VAT and IGIC (Canary Islands) are, for the most part, coincident and can be summarized as:
- The applicant must have resided outside the customs territory of the Union (for customs exemption) or the Community (for VAT and IGIC exemption) for at least 12 consecutive months prior to the transfer.
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The applicant must move or intend to move habitual residence to Spain.
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The imported personal property must have been in the possession of the interested party for at least 6 months before the transfer (the period for exemption from VAT or IGIC will be 12 months in the case of motor vehicles, trailers, caravans, transportable homes, recreational boats and tourist aircraft acquired under exemptions provided for diplomatic or consular regimes).
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The goods must be declared for free circulation within 12 months following the establishment of residence in the customs territory of the Union or before such transfer provided that the interested party undertakes to establish itself in the customs territory of the Union within a period of 6 months and, if applicable, provide a guarantee.
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Imported personal property must be used in the new residence for the same purposes as in the previous one.
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Imported goods may not be lent, pledged, rented or transferred for consideration or free of charge without prior informing customs until 12 months have elapsed from the admission of the declaration of release into free circulation.
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To enjoy the VAT or IGIC exemption, the goods must have been acquired or imported under the normal tax conditions in the country of origin and must not have benefited from any exemption or refund of the fees accrued on the occasion of their departure from said country. country.
This circumstance may be proven by any means of proof. Below, as an example, are some means of proof that could be used (in some cases it may be necessary to provide several):
- The deed of sale or mortgage constitution may be taken into account if it is accompanied by another document proving that the property acquired constituted the habitual residence.
- Proof of tax address
- Address on the identity document of the interested party
- Home insurance contracts in which it is stated as a habitual residence
- Proof of electricity, water or gas consumption or the existence of a landline telephone line with an internet connection that proves permanent occupation of the home
- Proof of the designation of the home as an address for the purposes of notifications from banks, insurance companies, property administrations, public entities, etc.
- Employment contracts of the interested party, their spouse, their children's school enrollment and any other document that may indicate coherence with the residence declared as habitual residence
As proof of compliance with this requirement, the following documents must be provided:
- Document accrediting the withdrawal of your previous residence outside the customs territory of the Union
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For Spanish citizens who transfer their residence to Spain, they will be deregistered as residents in the Spanish Consular Registration Registry abroad.
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For citizens of other nationalities, if their countries do not require consular withdrawal or issue any other official withdrawal document in the country of residence, any other document may be provided through which the change of residence is communicated or requested to any authority in the country. of origin (e.g. communication of the change of residence to the tax, health, pension authority, etc.)
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One of the following documents, depending on the applicant's citizenship:
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In the case of Spanish citizens, national identity document (DNI)
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In the case of citizens of an EU Member State or another State party to the Agreement on the European Economic Area, application or registration in the Central Register of Foreigners. (Ministry of Interior)
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In the case of citizens of other countries not included in the previous sections, application or foreign identification card (TIE). It certifies legal residence in a specific place in Spain and is granted after compliance with certain requirements (Ministry of the Interior)
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To prove this circumstance, a detailed list of the goods to be imported must be provided, indicating their estimated value and the date, at least approximate, of acquisition.
The request for customs exemption and VAT exemption will be made in the import declaration (DUA) itself without any prior application being necessary. In box 37.2 of said declaration, the codes 101 for the VAT exemption, 303 for the IGIC and C01 for the customs exemption must be recorded.
The definitive importation from a third country to Spain (EU) of the goods must be carried out within a period of twelve months from the date on which the interested party has established normal residence in the customs territory of the European Union.
As an exception to the previous period, exemption may also be granted to personal property declared for free circulation before the interested party has established his normal residence in the customs territory of the EU by means of a commitment to actually establish himself there within a period of six months. . This commitment will be accompanied by a guarantee in the form and for the amount determined by the corresponding Customs authorities. In this case, the goods must be cleared and leave the Customs premises without prejudice to the fact that they may be introduced into private premises and subject to the storage requirements established by each company.
The following will be excluded from the exemption of rights for transfer of residence:
- alcoholic products
- Tobacco and tobacco products
- Commercial means of transport
- Materials for professional use other than portable instruments of mechanical or liberal arts
In relation to alcoholic products and tobacco products, amounts that exceed those provided for in their respective regulations (referenced below) will be excluded from the VAT and IGIC exemption (applicable in the Canary Islands).
During a period of twelve months, counted from the date of acceptance of the declaration for free circulation, personal property admitted with exemption may not be loaned, pledged, for consideration or free of charge without having been informed of them the customs authorities.
If these operations are carried out, it will give rise to the application of import duties corresponding to the affected goods, according to the rate in force on the date of the loan, pledge, rental or transfer, based on the recognized or admitted customs value. on the date by the customs authorities.
No. If they are original sculptures, it would not be appropriate to analyze their possible tariff exemption, since these are classified in heading 9701 and are exempt from import duties. However, the correlation between exemption from import duties and exemption from VAT requires a unique qualification of such sculptures.
It would be necessary to distinguish between finished sculptures and unfinished ones.
For the joint analysis of the franchise and the exemption, it should be noted that if the object or purpose of the finished sculptures is sale, they would not benefit from the consideration of personal property and effects and therefore, the franchise or exemption would not apply. the exemption.
If the finished sculptures were part of the furniture as decorative elements, a part of their sculptures could be intended for personal use as decorative material in their home, so they could be considered included in the concept of art furniture. 2 of Regulation (EC) 1186/2009 and article 29 of Law 37/92 (VAT Law).
In conclusion, it will depend on the number of sculptures you import, how they are imported and how they are declared. Thus, those sculptures that are considered to be of decorative use for your residence may be imported free of import duties and VAT exemption. However, such sculptures would be conditional on compliance with the limitations on sales established in article 8 of the aforementioned Regulation and article 28.Dos.6 of the VAT Law: 12 months from importation in both cases.
Unfinished sculptures do not fall into the concept of decorative furniture, so the franchise and exemption for change of residence do not apply.
Like sculptures intended for sale, the franchise or exemption for relocating the headquarters of activity does not apply to unfinished sculptures. In both cases, semi-finished or finished products and raw materials are excluded from these benefits, as established in article 31 of the Regulation and 37 of the VAT Law.
Import duties and VAT will be applied based on its customs value and VAT tax base. Incomplete sculptures with the characteristics of complete ones are classified in heading 9701 with exemption from import duties and, in application of article 91.Uno.4 of the VAT Law, will be subject to the tax rate of 10% for this tax.
A distinction must be made between sculptures for decorative use in your home and those intended for transmission in the exercise of your professional activity. The former are exempt from import duties and VAT exemption if they meet the formal and temporal requirements and cannot be transferred during the twelve months following their importation. Import duties and VAT will be applied to the latter depending on their customs value and their VAT tax base. The finished sculptures and those incomplete but with the characteristics of complete, would be classified in heading 9701 with exemption from import duties and, in application of article 91.One.4 of the VAT Law, will be subject to the tax rate of 10% for this tax.
Raw materials and other elements that are not considered complete will be taxed based on their tariff classification for import duties and at a 21% VAT rate.
If goods considered investment or portable instruments necessary for the exercise of the importer's trade are imported, these will enjoy duty and exemption in application of article 28 of the Regulation and 37 of the VAT law (investment goods) or article 3 of the Regulation. and 28 of the VAT Law (transfer of residence), respectively.