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V1450-20 18 May 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Sale of weaponry to a warship manufacturer is subject to VAT

A missile manufacturing company has requested clarification on whether the sale of weaponry to a warship manufacturer is exempt from VAT. The DGT has ruled that the transaction is subject to the tax as the legal requirements for exemption are not met.

The question raised

Whether the sale of said weaponry to the manufacturer of warships is exempt pursuant to Article 22 of the Value Added Tax Law.

The DGT's ruling

The delivery of weaponry is not exempt because the acquirer is not the public entity that uses the vessels for defense, nor is the vessel registered in the Maritime Registry. For the exemption of incorporated objects to be valid, the recipient must be the operator or the owner, and the objects must be incorporated following the definitive registration of the vessel.

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