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V1719-17 4 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ejecución de obra

10% VAT rate applied to olive seasoning service transforming natural product into table olives

A company seasons fresh olives supplied by third parties to return them as table olives. The DGT has ruled that this process constitutes a transformation resulting in a distinct product, meaning the service is subject to the 10% VAT rate.

The question raised

Tax rate applicable to the performance of these works carried out for entrepreneurs or farmers.

The DGT's ruling

The seasoning of olives constitutes a work of execution that transforms a natural product into a different one (table olive). As it is not a mere operation of handling or preservation, the resulting service benefits from the reduced rate of 10% applicable to foodstuffs suitable for human nutrition, pursuant to Article 91.one.1 of the VAT Law.

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