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V4625-16 31 October 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Purchasing scrap metal from a non-profit association is subject to VAT and involves the reverse charge mechanism

A company sought clarification on whether purchasing scrap metal from a non-profit association is subject to VAT and how invoicing should be handled. The DGT ruled that the association acts as a taxable person and that the purchasing company is the liable party under the reverse charge mechanism.

The question raised

The issue concerns the taxability of the acquisition of scrap from the association, as well as the application of the reverse charge mechanism and the obligation to issue an invoice documenting such acquisitions.

The DGT's ruling

Non-profit associations hold the status of entrepreneurs when they carry out commercial activities on a continuous basis while assuming the risk. The delivery of scrap and waste products by the association is subject to VAT. The taxable person is the acquirer by means of the reverse charge mechanism. The association must issue an invoice indicating that the recipient is the taxable person by means of the mention "reverse charge".

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