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V1020-22 6 May 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

The reduced rate of 4% applies to shredded and desiccated coconut due to its status as a natural product

A company inquires about the VAT rate applicable to coconut of the 'nucifera' variety imported in a shredded and desiccated state following processes of shelling, washing, cutting, bleaching, drying, and sieving. The DGT determines that these processes are simple manipulations that do not alter its status as a natural product.

The question raised

Question raised: Tax rate applicable for the purposes of Value Added Tax.

The DGT's ruling

Shredded and desiccated coconut is taxed at a 4% VAT rate because it is considered a natural product. The processes of shelling, washing, cutting, drying, and sieving are considered simple operations of manipulation or preservation that do not transform the product. For a product to be natural, it must maintain its original characteristics and must not have been subjected to transformation techniques that convert it into a derived or processed product.

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