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V1814-18 21 June 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · mediación financiera

Financial intermediation by dealerships may be VAT exempt if mediation requirements are met

A query was raised regarding whether the financial intermediation activity of a manufacturer and its dealerships is exempt from VAT and how discounts affect the taxable base. The DGT determines that the activity is exempt if it qualifies as mediation and analyses the treatment of discounts depending on which party grants them.

The question raised

1. Whether the exemption provided for in Article 20.One, paragraphs 18.m) of Law 37/1992 is applicable to the financial intermediation activity carried out by the applicant and the dealers.

The DGT's ruling

Intermediation activity is exempt if the provider is an independent third party that brings the parties together and their functions go beyond the mere provision of information. In a chain mediation, each link must perform services specific to mediation to maintain the exemption. Discounts from the manufacturer to the end customer allow for a reduction in the taxable base of the manufacturer's supplies, but not that of the dealer. If the discount is granted by the dealer for financing, it reduces its taxable base for the sale of the vehicle.

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