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V4048-15 16 December 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

Clothing sales from the Canary Islands to mainland Spain or the EU are imports, not VAT-taxable supplies

A company based in the Canary Islands has requested clarification regarding the VAT treatment of online sportswear sales to customers in mainland Spain and other EU Member States. The Directorate General for Taxes (DGT) clarifies that these supplies are not subject to VAT as they do not take place within the tax territory; instead, the entry of the goods into mainland Spain or the Balearic Islands constitutes an import.

The question raised

Treatment for Value Added Tax purposes.

The DGT's ruling

Deliveries of goods dispatched from or transported from the Canary Islands to the Peninsula, the Balearic Islands, or another Member State do not constitute deliveries of goods subject to VAT. The entry of said clothing into the territory to which the tax applies shall constitute an importation pursuant to Articles 17 and 18 of Law 37/1992. Likewise, sales from the Canary Islands to other EU Member States are not intra-Community operations, as the Canary Islands is a territory excluded from the harmonization of turnover taxes in the European Union.

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