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V1484-14 5 June 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ejecución de obra

Reduced 10% VAT rate applies to the processing and packaging of products for juices or beverages

A company that processes raw materials provided by clients to produce juices, beverages, and horchata has requested clarification on the applicable tax rate. The DGT has determined that these operations constitute works executed for a price, which are subject to a 10% VAT rate.

The question raised

Issue raised - Applicable tax rate. - Taxable base.

The DGT's ruling

The operations of transformation and packaging of raw materials to obtain a different good (such as juices or beverages) constitute a performance of work classified as a provision of services. As it results in a good taxed at the reduced rate, a 10% VAT rate applies pursuant to Article 91.Three of Law 37/1992. The taxable base includes the total amount of the consideration, including packaging or containers.

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