Back to index
V3530-16 27 July 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · devengo

Corporation Tax income and VAT accrual occur upon delivery of goods, not on advance payments

A company requested a ruling regarding Corporation Tax and VAT treatment for the sale of oak barrels to a distillery in the United Kingdom. The DGT has determined that both income recognition and VAT accrual take place upon the delivery of the goods, regardless of any advance payments made.

The question raised

What would be the taxation of the transaction, in terms of both VAT and Corporate Income Tax?

The DGT's ruling

In Corporate Income Tax, income is accrued when the delivery or making available of the goods occurs, at which point ownership is acquired. For VAT, the transaction is a taxable supply of goods but exempt if the requirements for intra-Community supply are met. The VAT accrual occurs on the 15th day of the month following the commencement of transport or on the invoice date, without advance payments altering this timing.

Book your free first meeting