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On November 22, the Directorate General for Taxation issued a resolution establishing that the sale of used objects between individuals must be considered a transaction subject to transfer tax.

The resolution answered a query from a taxpayer inquiring about the tax system applicable to sales of second-hand objects and personal belongings the latter carried out through a website.

As surprising as it may seem, that is what the regulatory regulation on transfer tax establishes.

In general, under the regulation, all inter vivos transfers involving all kinds of goods and rights making up the estate of individuals and companies are subject to transfer tax, unless the transfers are carried out by businesses or professionals in the scope of their business or professional activity, in which case VAT would apply.

The buyer (not the seller) would be liable for the tax and must submit the corresponding self-payment form of the tax (form 600), paying the corresponding amount established under the applicable regional legislation; under state legislation, it would be 4% of the transferred good’s real value.

We highlight that the regulation does not establish a threshold under which there is a tax exemption on these kinds of transactions between individuals although, in practice, these kinds of transactions (excluding the transfer of vehicles, as these must be registered with the corresponding traffic authority) are not usually communicated to the internal revenue service. Maybe this is due to a lack of knowledge. However, we must not forget the principle under law of ingorantia legis neminem excusat (ignorance does not imply exemption from complying with the law).

Authors: Derek Lou, José Luis Gaudier (Digital Business Tax Group)

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