The Spanish Supreme Court considers that the transfer of a supermarket business is subject to stamp duty
Published on 23rd Mar 2022
The Spanish Supreme Court has issued a ruling, on 20 January 2022, declaring that the first copy of a public deed, recording the sale and purchase of a business carried out in premises as a supermarket is subject to stamp duty, in accordance with article 31.2 of the Spanish Act on Transfer Tax and Stamp Duty. This conclusion is based on the fact that the transfer can be registered in the Spanish Registry for Moveable Property, even if the transfer is not actually registered.
The case attempts to determine whether the first copy of a notarial deed, recording the sale and purchase agreement of a supermarket business is an act subject to stamp duty, in accordance with article 31.2 of the Spanish Act on Transfer Tax and Stamp Duty (the "Stamp Duty Act"), on the basis that it could be registered in the Spanish Registry for Moveable Property. This Registry was created by the Royal Decree 1828/1999, dated 3 December, approving the Regulations for general contract terms and conditions (Sole Additional Provision).
The controversy in the appeal revolves around the issue of whether a supermarket can be considered a trading establishment with access to the Registry for Moveable Property.
In this context, article 31.2 of the Stamp Duty Act requires, for a notarial deed to be subject to stamp duty, that (i) the notarial deed be a first copy; (ii) that the deed relate to a quantity or an object of determinate value, (iii) that the deed record contracts or acts which can be registered in certain specific registries (including the Registry for Moveable Property) and (iv) that the act not be subject to Inheritance and Gift Tax or to Transfer Tax.
The Spanish Supreme Court rules that the first copy of a notarial deed recording a sale and purchase agreement of a supermarket business is an act subject to stamp duty, in accordance with article 31.2 of the Stamp Duty Act, on the basis that it could be registered in the Spanish Registry for Moveable Property. It is not necessary that for the transfer to actually be registered and the effects or the validity of such registration are not considered material by the Court.
With this novel view, the Supreme Court may be allowing for any public deed recording the transfer of any business or trading establishment, with the potential to be registered in the Registry for Moveable Property. Taxation, to be subject to stamp duty regardless of whether registration does occur or not, of whether such registration is compulsory or voluntary and regardless of the efficacy or the consequences of such registration.
