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V1797-24 18 July 2024 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

Sale of vehicles from the Canary Islands to mainland Spain is subject to VAT based on location and taxable person

A Canarian company sells vehicles to a company in mainland Spain. The DGT analyses whether the transaction is subject to VAT and who the taxable person should be, depending on the location of the goods and the existence of a permanent establishment.

The question raised

Value Added Tax that must be settled as a consequence of the transaction.

The DGT's ruling

If the vehicles are located on the mainland and are made available to the client there, the transaction is subject to VAT. If the Canarian company has a permanent establishment on the mainland, it shall be the taxable person; if it does not have one, the Spanish acquiring company shall be the taxable person via the reverse charge mechanism. If the vehicles are sent from the Canary Islands, an import will occur and the taxable person shall be the importer.

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