Manufacturing of olive pit pellets: correct heading in the IAE

The correct classification of an economic activity in the Business Activities Tax (IAE) is fundamental to ensure compliance with tax obligations and avoid errors in the declaration of income and expenses.

What the DGT has ruled

The Directorate General of Taxes (DGT) has addressed the question of which heading should be used for the activity of manufacturing pellets from olive pits. After analyzing the nature of the process, the body has ruled that this activity must be registered under heading 251.2 of the first section of the tariffs, corresponding to "Manufacturing of other organic chemical products".

This criterion establishes that registration under said heading not only covers the transformation of the waste into pellets but also empowers the entity to:

• The wholesale of the industrial products obtained.
• The retail of the industrial products obtained.
• The acquisition of the raw materials necessary to carry out the production process.

What it means for you

If your company develops transformation processes for vegetable waste, such as olive pits, to obtain biofuels or similar products, the correct assignment of the heading is decisive. The use of heading 251.2 allows for the integration of both the production and the commercialization of the resulting products, as well as the management of the necessary inputs, within a single activity.

An erroneous classification could lead to a lack of correspondence between the actual activity and the one declared to the Administration, which affects the cost structure and the justification of the economic activity before third parties.

What should be done

It is necessary to verify that the current IAE registration of companies dedicated to the manufacturing of plant-based pellets complies with this DGT criterion. The correct determination of the heading ensures that the company has the legal authority to purchase raw materials and sell its industrial products under a single heading. It is recommended to assess the specific situation of your activity to confirm that the applied classification is appropriate according to current regulations.