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V1633-24 5 July 2024 · SG de Impuestos sobre el Consumo Criterion in force
IVA · contrato de cobertura

Positive settlements from risk hedging contracts are exempt from VAT and do not affect the calculation of the pro rata

A holding company requested clarification on whether income from positive settlements in energy price hedging contracts (swaps) is subject to VAT. The DGT ruled that this income does not constitute a supply of services and should not be included in the calculation of the pro rata.

The question raised

Whether the positive settlements that the taxpayer might receive arising from such unilateral risk hedging contracts would be subject to Value Added Tax. If so, whether they would limit their right to deduct the Value Added Tax incurred in their activity.

The DGT's ruling

Hedging contracts that do not involve the physical delivery of energy are financial service provisions exempt from VAT. Positive settlements in favor of the party contracting the derivative do not constitute a service provision of their own, but rather a mere risk guarantee. Therefore, such income is not subject to VAT and must not be included in the denominator for the calculation of the pro rata.

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