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V0346-17 8 February 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

VAT treatment depends on whether component manufacturing is classified as a supply of goods or a supply of services

A Spanish company designs processes and manufactures tooling to subsequently produce integrated components for a client in the USA. The DGT examines whether these operations constitute a single transaction and how they are taxed based on the value of the materials provided.

The question raised

The question is raised regarding the Value Added Tax treatment of the operation consisting of the design of the production process and the manufacture of tooling parts, as well as the manufacture of the integrated parts by the applicant.

The DGT's ruling

The design and manufacture of tooling are considered a single operation ancillary to the manufacture of parts. If the materials provided by the company are insignificant, it is a provision of services that is not taxed in Spain as the client is from the USA. If the company's own materials are significant, it is a supply of goods that could be exempt if the requirements for intra-Community supplies are met.

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