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V1181-16 23 March 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

Classification of transaction as supply of goods or provision of services depends on who provides the materials

A company seeks guidance on the tax treatment of applying non-stick coating to metal parts for a client in another Member State. The DGT determines that if the client provides the part, it constitutes a provision of services; if the company provides the part, it constitutes a supply of goods.

The question raised

Question raised: Taxation of the operations carried out by the applicant.

The DGT's ruling

If the entrepreneur provides all the materials or those provided by the client are insignificant, it is considered a supply of goods. If the client provides the essential materials, it is a provision of services. In the case of a supply of goods to an intra-Community customer, the transaction is exempt. If it is a provision of services to an entrepreneur not established in Spain, the transaction is not subject to VAT in Spanish territory.

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