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Product Transformation: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 11 rulings · 2014–2026

Current position

Product transformation involves obtaining a good different from the original. If the process is an execution of work resulting in a good with a reduced rate, a 10% IVA (Value Added Tax) rate applies. Packaging, labeling, ornamentation, or product classification operations are not considered transformation and allow for maintaining the status of a retail trader subject to the equivalence surcharge.

The DGT's position remains constant in the distinction between substantial transformation and activities of mere preservation or conditioning. Throughout the rulings, it has been specified that packaging, labeling, or simple classification does not alter the nature of the product for the purposes of the equivalence surcharge. The doctrine confirms that transformation requires the creation of a different good.

Turning points

  1. V2436-21

    Specifies that basic packaging and labeling does not constitute transformation, allowing the subject to maintain their status as a retail trader.

  2. V1359-26

    Establishes that the mixing of materials to generate compost constitutes a transformation that excludes the activity from the special agricultural regime.

Analysis based on 11 of 11 rulings with a stated position. Updated 28 September 2026.

Rulings on this topic

11

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