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V0537-22 17 March 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

Repurchase agreement classified as financing service, exempt from VAT

A Dutch company asked whether its raw materials repurchase contract constituted a goods delivery or a financial services arrangement. The DGT determines it is not a goods delivery as it does not transfer full disposal rights, but rather a loan with goods as collateral, which is VAT-exempt.

The question raised

Taxation of the repurchase agreement described for the purposes of Value Added Tax, and specifically, regarding the nature of the transaction as a supply of goods or a provision of services of a financial nature.

The DGT's ruling

The transaction does not constitute a supply of goods because the customer retains the risks of loss or damage to the merchandise. It is classified as a provision of financing services through a loan with a pledge of raw materials. If subject to tax due to the customer's location, the transaction is exempt as it constitutes a grant of credit and a loan of money.

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