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V0465-22 10 March 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · actividad agrícola

Registration under the oil manufacturing category is required if olive processing is subcontracted

A farmer has enquired about their registration in the IAE (Economic Activities Tax) and the taxation of VAT and Income Tax when selling olives and marketing oil processed by third parties. The DGT clarifies that processing on commission constitutes an industrial activity and must be taxed separately.

The question raised

1st: Whether they must register under any heading of the Tax on Economic Activities.

The DGT's ruling

Pure agricultural activity is not subject to the IAE. However, if the farmer commissions an olive mill to transform olives into oil for subsequent sale, they are performing an industrial activity. In this case, they must register under heading 411.1 of the IAE Tariffs. This transformation activity constitutes a separate sector from the special agricultural regime for VAT purposes.

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