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V0814-22 19 April 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

Sales of raw materials from Spanish suppliers to Portuguese branches are subject to VAT

A textile company has requested clarification on the VAT treatment of a manufacturing operation between Spain and Portugal. The DGT has determined that the sale of raw materials from Spanish suppliers to a Portuguese branch constitutes a domestic supply subject to VAT, whereas the nature of the construction work will depend on the relative importance of the materials provided by each party.

The question raised

Treatment of operations for Value Added Tax purposes. Reporting obligations.

The DGT's ruling

The delivery of raw materials by Spanish suppliers to the Portuguese branch is an domestic supply subject to VAT. The classification of the execution of work as a supply of goods or a provision of services depends on the relative importance of the materials provided by the client compared to those provided by the manufacturer. If it is a provision of services and the recipient is the applicant in Spain, the reverse charge mechanism shall apply. Operations assimilated to intra-Community supplies and acquisitions must be included in the recapitulative statement.

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