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V1798-24 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 subject to VAT based on location of goods

A Canarian wholesale company has requested clarification on which VAT rules apply when selling vehicles to a company in mainland Spain. The DGT has ruled that VAT liability depends on whether the vehicles are already located on the mainland or are being shipped from the Canary Islands.

The question raised

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

The DGT's ruling

If the vehicles are in the peninsula and are made available to the client there, the operation is subject to VAT at a rate of 21%. If the Canarian company has a permanent establishment in the peninsula, it is the taxable person; if not, the Spanish company applies the reverse charge mechanism. If the vehicles are sent from the Canary Islands, an import occurs and the taxable person shall be the acquiring company.

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