The intragroup transfer of shares by a mixed holding company falls within a differentiated sector for VAT purposes, unless it entails the transfer of an autonomous economic unit

The Spanish Supreme Court, in its judgment of 11 March 2026 (Contentious-Administrative Chamber, Second Section, judgment no. 308/2026, cassation appeal no. 4660/2023, Judge Rapporteur Manuel Fernández-Lomana García), lays down case-law doctrine with a direct bearing on the VAT treatment of mixed holding companies and on the deduction of input VAT. Intragroup transfers of shares by a mixed holding company fall within the differentiated sector “financial activity” for the purposes of the differentiated-sector rules of the VAT Act (LIVA). Those same transactions may, however, fall outside the scope of VAT where they indirectly entail the transfer of an autonomous economic unit capable of carrying on a business activity by its own means.

To understand the reach of the judgment, we need to start from the legal framework, because the interplay between differentiated sectors, the pro rata and transactions outside the scope of VAT is the key to the regime.

A mixed holding company combines holding shares in other companies —typically operating subsidiaries— with a business activity of its own. Two levels intersect in these structures for VAT purposes. On the one hand, managing the portfolio and, where applicable, selling shares is a financial activity which is generally exempt from VAT and carries no right of deduction. On the other hand, the holding’s typical operating activity —management services to subsidiaries, manufacturing, distribution and the like— is taxable and not exempt, with a right of deduction.

Where distinct economic activities are carried on —falling within different groups of the National Classification of Economic Activities— and the deduction percentage of any of them differs by more than 50 percentage points from that of the main activity, the VAT Act requires the differentiated-sector regime to be applied (articles 9.1.c).a’ and 101.One LIVA). Each sector applies its own deduction rule to the input VAT on the goods and services allocated to it, and the financial activity —being exempt— does not allow the input VAT on the goods and services used for it to be deducted.

Against that general rule, article 7.1º LIVA places outside the scope of the tax transfers of a set of tangible and, where applicable, intangible assets which, forming part of the transferor’s business assets, constitute or are capable of constituting an autonomous economic unit able to carry on a business or professional activity by its own means. Such a transaction falls outside VAT and, as a result of article 104.Three.5º LIVA, is not taken into account in calculating the pro rata.

The question of cassation interest put to the Supreme Court was twofold. First, whether an intragroup transfer of shares by a mixed holding company must necessarily be included in the differentiated sector of financial activity. Second, whether the same transaction may fall outside the scope of VAT under article 7.1º LIVA where it indirectly entails the transfer of an autonomous economic unit.

The appellant was Sacyr, S.A. (formerly Sacyr Vallehermoso). In 2009 it had sold a majority stake in Itinere Infraestructuras, formerly the head of its concessions business, and had acquired the concession assets excluded from that sale together with their loans. Through a Framework Agreement with Sacyr Concesiones, a company in its group, it transferred to the latter the economic results of its minority stake in Itinere and of its shareholdings in those concession assets, together with the related loans, and undertook to transfer legal title to the shares once the necessary authorisations were obtained. The tax authorities took the view that the transaction belonged to the differentiated sector of financial activity and had to be included in the pro rata calculation, reducing the deductible input VAT accordingly. The appellant argued that the transaction in fact amounted to the indirect transfer of an autonomous economic unit and should fall outside VAT under article 7.1º LIVA.

The Supreme Court sets out its doctrine in two holdings.

Under the first, intragroup transfers of shares by a mixed holding company must be regarded as included in the differentiated sector financial activity for the purposes of articles 9.1.c).a’ and 101.One LIVA. This operates as a general rule: selling shares is an activity in its own right, distinct from the holding’s other operating activities, and by its nature belongs to the financial sector.

Under the second, that general rule admits a significant exception. An intragroup transfer of shares may fall outside the scope of VAT under article 7.1º LIVA where it entails the indirect transfer of an autonomous economic unit capable of carrying on a business or professional activity by its own means. In that case the transaction falls outside the tax and is not taken into account in the pro rata calculation, in accordance with article 104.Three.5º LIVA.

Whether there is an autonomous economic unit is not decided by labels, but by a case-by-case examination of what is actually transferred. The Court recalls its own case law (judgments of 28 September 2011, 22 November 2012, 12 May 2016 and 7 April 2025) and that of the Court of Justice of the European Union on article 19 of Directive 2006/112/EC (judgments of 27 November 2003, case C-497/01, Zita Modes; of 29 October 2009, case C-29/08, SKF, which accepts that a transfer of shares may amount to the transfer of a totality of assets; and of 10 November 2011, case C-444/10, Christel Schriever), and holds that the decisive question is whether the transfer allows an autonomous economic activity to be continued. The analysis must be carried out in the light of the nature of the economic activity concerned, and must consider whether what is transferred comes with the material and human resources the transferee needs to carry on the activity by its own means.

Applying that test, the Court concludes that no autonomous economic unit was transferred, for two reasons.

The first is that the Framework Agreement merely transferred part of the rights attaching to certain shareholdings, and such a partial transfer cannot in itself be regarded as an autonomous economic unit.

The second is that the transferee —Sacyr Concesiones— already had the know-how and resources needed to manage the business, so the transaction transferred no material or human resources; the concession assets and loans were not, on their own, sufficient to carry on an economic activity; and, in any event, what was transferred was not those assets but the shares corresponding to them.

The Supreme Court accordingly upholds the judgment of the Audiencia Nacional (National High Court, Fifth Section) of 19 April 2023, dismisses the cassation appeal and confirms the assessment that had placed the transaction in the differentiated sector of financial activity and included it in the pro rata calculation.

In our view, the Supreme Court strikes the right balance between the general rule and the exception.

The general rule —intragroup transfers of shares belong to the financial sector— follows the logic of the differentiated-sector regime. Where selling shares has substance and autonomy of its own relative to the holding’s other operating activities, it should be grouped with the other financial transactions and subject to their own input-VAT deduction rules.

The exception —transactions outside the scope of VAT where an autonomous economic unit is indirectly transferred— follows, in turn, the logic of article 7.1º LIVA and the European case law on article 19 of the VAT Directive. Where a transaction, although structured as a transfer of shares, is economically equivalent to the transfer of a going concern, the law treats it as such and takes it outside the tax.

The judgment is of particular interest to multinational groups and to holding companies with an operating activity of their own, and suggests three lines of action.

The first is to identify clearly the group structure and the differentiated sectors for VAT purposes. The financial activity and the operating activity may produce different deduction percentages that justify treating them separately, with an effect on deductible input VAT.

The second is to assess, case by case, whether an intragroup transfer of shares can rely on article 7.1º LIVA. To support treatment outside the scope of VAT, it must be shown (i) that what is transferred includes the material and human resources needed to carry on the activity by itself; (ii) that the transaction allows an autonomous economic activity to continue in the hands of the transferee; and (iii) that the know-how and the business organisation actually accompany the transfer.

The third is to document, contemporaneously, the assets transferred, the human and material resources passing to the transferee and the continuity of the activity. The judgment itself stresses that the assessment is case-specific and rests on the evidence of each transaction.

In short, the Supreme Court holds that an intragroup transfer of shares by a mixed holding company belongs, as a general rule, to the differentiated sector of financial activity for VAT purposes, but may fall outside the scope of the tax where it entails the indirect transfer of an autonomous economic unit —which requires checking, case by case, that the material and human resources needed to continue the business activity are transferred—.