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V1292-20 7 May 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · pago anticipado

Advance payments for exports are VAT exempt if operational requirements are met

A company seeks clarification on how to account for VAT on advance payments received from a Chinese client for goods to be exported. The DGT rules that while the advance payment triggers the tax liability, the export exemption applies provided all legal requirements are satisfied.

The question raised

Value Added Tax treatment applicable to advance payments made by the client of the applicant in the operation subject to this consultation.

The DGT's ruling

The collection of advance payments prior to the delivery of goods triggers the accrual of tax on the proportional amount received. In export operations, this accrual must follow the regime of the principal operation; therefore, the advance payment shall be exempt if the requirements of the Law and the Regulation are met. If the requirements for exemption are subsequently not met, the company must carry out the corresponding rectifications by means of a corrective invoice.

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