Back to index
V3045-23 23 November 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

Electricity supplies are subject to VAT if the purchaser is a reseller or consumes within the scope of the tax

An electric power producer in the Canary Islands has requested clarification on whether their activity is subject to VAT and if they can deduct VAT incurred on the mainland. The DGT clarifies that taxability depends on the location of the purchaser or the place of consumption, and that the refund of input VAT is subject to compliance with the requirements of Article 119 of the VAT Act.

The question raised

Whether the activity performed is subject to Value Added Tax and whether the VAT amounts incurred in the territory to which said tax applies may be deducted.

The DGT's ruling

The supplies of electricity are subject to VAT when the recipient is a reseller entrepreneur or professional with a registered office or establishment in the territory to which the tax applies, or when the acquirer makes the actual use or consumption in said territory (as measured by the meter). If the inquirer carries out operations in the territory of application where they assume the status of a taxable person, they may not use the refund procedure provided for in Article 119 of Law 37/1992.

Book your free first meeting