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V0467-14 21 February 2014 · SG de Impuestos Especiales y de Tributos sobre el Comercio Exterior Criterion in force
OTRO · labores del tabaco

Manufacturing cigarettes using automatic machines from tobacco leaf is considered manufacturing

A consultant asks whether they can install a machine that shreds tobacco and rolls cigarettes for the end consumer. The DGT rules that this process constitutes manufacturing and must be carried out in an authorised factory.

The question raised

Obligations relating to the Tobacco Duties Tax in connection with the described activity.

The DGT's ruling

Unprocessed tobacco leaf is not subject to the Tobacco Duties Tax, whereas cut or fractionated tobacco is. The process of obtaining a taxable product from a non-taxable one constitutes manufacturing and not transformation. Therefore, said activity must be carried out in an authorized factory and requires registration in the Register of Operators of the Tobacco Market Commissioner.

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