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V3180-21 22 December 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios

Processing services in Portugal and the impact on goods transformed in Spain are subject to VAT

A fur company has requested a ruling regarding VAT taxation on the importation of goods from Mexico and their subsequent processing in Portugal. The DGT has determined that the processing services provided by the Portuguese entity are subject to VAT in Spain, and that the transfer of the processed goods to Spain is considered an operation assimilated to an intra-Community acquisition.

The question raised

Whether the import and the transformation services on the goods would be subject to Value Added Tax. Nature of the goods.

The DGT's ruling

The services for the transformation of goods provided by an entrepreneur in Portugal to a recipient based in Spain are considered to be carried out within the territory of application of the Tax. Likewise, the use for business activity in Spain of goods that have been transformed in another Member State and transported from there is considered an operation assimilated to an intra-Community acquisition, being subject to VAT. Regarding the initial import, the DGT cannot determine the customs regime without further information.

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