The High Court of Justice of the Balearic Islands confirms the doctrine of the DGT and the TEAC, according to which, when the transfer concerns only the property itself, without including the organizational structure required to operate the business, the transaction is subject to VAT and not to Property Transfer Tax.
The indirect taxation applicable to the acquisition of hotels remains a controversial issue.
In this type of transaction, it is essential to analyse whether the operation is subject to VAT or to Property Transfer Tax (PTT), which depends on how the concept of autonomous economic unit referred to in Article 7.1 of Law 37/1992, of 28 December, regulating VAT, is interpreted. Subjection to one or the other tax can have a significant economic impact on the buyer (VAT uses to be neutral in the business context and PTT uses to entail a cost).
The aforementioned article establishes that the transfer of a set of elements that, forming part of the business or professional assets of the taxpayer, constitute or are likely to constitute an autonomous economic unit in the transferor, capable of carrying out a business or professional activity by its own means, will not be subject to VAT. If it is concluded that a certain transaction is not subject to VAT by application of said article, then, in accordance with article 7.5 of Royal Legislative Decree 1/1993, of 24 September, which approves the Consolidated Text of the PTT and Stamp Tax Law, it could be subject to PTT (“the transfer of real estate included in the transfer of a business or professional assets shall be subject to this tax when, due to the circumstances involved, the transfer of these assets is not subject to Value Added Tax”).
Practice shows, however, that it is not always easy to conclude whether we are dealing with an autonomous economic unit. In particular, this aspect has been subject to differing interpretations in the context of hotel property transactions.
The Spanish General Directorate of Taxes (DGT) and the Central Economic-Administrative Court (TEAC), in their most recent and reiterated doctrine, have interpreted that, for an autonomous economic unit to exist, it is not enough to transfer a property for hotel use, including its licenses and furniture. On the contrary, a sufficient organizational structure must be transmitted, which must normally include material and human resources, as well as the legal relationships necessary to continue the economic activity. In this regard, it is worth referring to DGT resolutions V3270-17, V2471-17 or V3250-18, or to the TEAC resolutions of 21 October 2020 and 21 November 2022. In all of them, it is concluded that the transfer of a hotel property without the staff who operate it constitutes a mere transfer of goods subject to VAT, not a transfer of an autonomous economic unit not subject to said tax.
Nevertheless, despite the clarity and reiteration of this administrative doctrine, certain regional tax authorities, competent for the PTT, have interpreted that the transfer of a hotel property together with its licenses and equipment can be considered, on its own, an autonomous economic unit; this has led to PTT assessments on transactions involving the purchase of real estate properties for hotel use in which the operation was separate from the ownership and fell on a different entity, which has caused some legal uncertainty in the sector.
In this context, the High Court of Justice of the Balearic Islands issued a judgment of 9 July 2025, dismissing the contentious-administrative appeal filed by the regional tax administration and upholding the TEAC’s resolution of 15 December 2022, which declared the sale of a property for hotel use located in Mallorca subject to VAT.
The court emphasized that the particular circumstances of each transaction must be examined in order to verify the scope and extent of what has been transferred. In the case in question, the property was sold free of leases, while the hotel operation had previously been transferred between two different companies, with their own staff, furniture and licenses. In view of these factors, the court concluded that it was not an autonomous economic unit that was transferred, but only the real estate asset, which implies the subjection of the transaction to VAT. In this way, the judgment reaffirms the TEAC’s position in that same procedure and in previous resolutions.
This judicial pronouncement provides legal certainty in this type of real estate transactions, without prejudice to the need to carefully analyse, in each case, the specific circumstances of the purchase and sale of hotels (and any other property) in order to properly frame the operation in the field of VAT or PTT and Stamp Tax.
