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Practical Handbook VAT 2021

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  1. 7,000,000 in the previous year, tax is payable exclusively in the territory where the tax domicile is located, irrespective of where the transactions are carried out.

    Example:

    A company domiciled in Cordoba has carried out the following operations in the year "n-1".

    • It has provided services located in Pamplona amounting to 500,000 euros.
    • It has provided services located in the common territory amounting to 500,000 euros.

    7,000,000 in year "n-1", this company will submit in year "n" its self-assessments of VAT, for the total of the transactions it carries out, in common territory.

    In the event that the taxpayer changes his tax domicile during the tax year, he will pay tax to the administration in whose territory the initial tax domicile is located until the date of the change of domicile, and to the administration in whose territorial demarcation the new domicile is located as from the date of the change of domicile.

  2. 7,000,000 in the preceding year and operates exclusively in one territory, it shall be taxed exclusively in the territory in which it operates, regardless of the place where it has its tax domicile.

  3. When the figure of 7,000,000 euros is exceeded in the previous year and operations are carried out in both territories, tax is payable in each Tax Administration in the proportion that the operations carried out in each of them represent in relation to the total number of operations carried out, regardless of the place in which the tax domicile is located.

    Example:

    A company domiciled in Cordoba carried out the following transactions in the year "n-1":

    • It has provided services located in Pamplona amounting to 5,000,000 euros.
    • It has provided services located in the common territory for an amount of 5,000,000 euros.

    Total operations:5.000.000 + 5.000.000.000 = 10.000.000.000 Euros

    5.000.000.000/10.000.000.000 x 100 = 50% percentage of taxation in common territory.

    5.000.000.000/10.000.000.000 x 100 = 50% percentage of taxation in the tax territory.

    7,000,000 in the year "n-1", in the year "n" two self-assessments must be submitted in each settlement period:one in the common territory for 50% of their results and another in the foral territory for the remaining 50%.These percentages will be provisional and at the end of the year, a regularisation will be made according to the definitive percentages of the operations carried out in the current year.