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Practical Handbook VAT 2021

Deliveries of goods and provision of services by companies and professionals

The VAT applies to supplies of goods and services in respect of which the following conditions are met at the same time:

  1. The supply of goods or services for consideration.Certain self-consumption of goods or services for consideration are treated in the same way as supplies of goods or services for consideration.

  2. It must be carried out by an entrepreneur or professional.

  3. That it is carried out in the course of a business or professional activity.

  4. The transaction is carried out within the spatial scope of application of the tax.

  5. The transaction does not appear among the cases of non-taxation provided for in the Law, i.e. it is not a non-taxable transaction.

  6. The transaction does not appear among the exemptions provided for in the Law, i.e. it is not an exempt transaction.

Each of these requirements is discussed in detail below.

However, due to the particularities of their taxation, the following transactions are analysed in a separate section of this chapter:

  1. Intra-Community supplies and acquisitions of goods under consignment sale agreements.

  2. The distance sales, intra-community sales and sales of imported goods.

With regard to distance sales, it is worth highlighting the amendments introduced with effect from 1 July 2021 by Article 10 of Royal Decree-Law 7/2021 of 27 April and Royal Decree 424/2021 of 15 June on the taxation of supplies of goods, generally contracted via the Internet, to end consumers by suppliers established outside the European Union or in Member States other than the Member State of consumption.

The main modifications introduced as of 1 July 2021 are as follows:

  1. The modification of the EU distance selling regime through the creation of a new category of supply of goods:intra-Community distance sales. The new system involves taxation at destination of intra-Community sales to private individuals, except for sales made by micro-enterprises established in a single Member State which make intra-Community sales to private individuals in other Member States on an occasional basis, which will be taxed in the Member State of establishment up to the limit of EUR 10 000 (excluding VAT) and in the Member State of consumption once this limit has been exceeded, with the possibility of opting for taxation at destination even if the limit has not been exceeded.

  2. The implementation of a special scheme similar in nature to the Community distance selling scheme for sales of goods imported from third countries or territories, which incorporates an exemption on the importation of those goods for which the taxable person avails himself of the new import scheme that is created.

  3. The import VAT exemption for low-value goods is eliminated.

  4. The involvement of digital platforms in the collection of VAT due on certain distance sales of imported goods and sales located within the Community. To this end, the necessary amendments are introduced to consider them as taxable persons in certain transactions in which they are involved and in which they are deemed to receive the goods from the supplier and deliver them to the final consumer.In order to avoid double taxation, the supply from the supplier to the platform will be exempt and eligible for deduction.

  5. The unification of the limit determining the destination taxation of intra-Community distance sales and telecommunications, radio or television broadcasting and electronically supplied services carried out or provided by micro-enterprises established in a single Member State.

The above amendments are complemented by the extension, with effect from 1 July 2021, of the one-stop-shop regimes, by replacing the special regimes applicable to telecommunications, radio and television broadcasting and electronically supplied services by the following:

  1. The external EU regime, applies to services provided by entrepreneurs or professionals not established in the Community to recipients who are not entrepreneurs or professionals acting as such.

  2. The Union scheme, applies to services provided by entrepreneurs or professionals established in the Community, but not in the Member State of consumption, to recipients who are not entrepreneurs or professionals acting as such, to intra-Community distance sales of goods and to the internal supply of goods carried out under the conditions laid down in Article 8a.(b) of the VAT Act.

  3. The import regime, applies to distance sales of goods imported from third countries or territories.

As a consequence of the above changes, the "Mini One-Stop Shop" is renamed "One-Stop Shop" or "One-Stop Shop" (OSS) and the "Import One-Stop Shop" (IOSS)is created, to be included in the One-Stop Shop from 1 July 2021, in addition to telecommunications, radio or television broadcasting services and services provided electronically to final consumers, the following operations:

  1. Intra-Community distance sales of goods.

  2. Distance sales of imported goods.

  3. All services supplied to final consumers by traders or professionals not established in the Community.

  4. All services provided to final consumers by traders or professionals established in the Community but not in the Member State of consumption.

  5. Supplies of goods located within the Community where the taxable person is an electronic interface within the meaning of 8.bis(b) of the VAT Act.

The new regimes are complemented by the introduction of a special modality for the declaration and payment of imports made by those entrepreneurs or professionals who, fulfil certain requirements and are entitled to use the import regime, but do not do so.

  1. A) Concept of delivery of goods and provisions of services
  2. B) Concept of companies or professionals
  3. C) Concept of business or professional activity
  4. D) Operations carried out in the territory
  5. E) Non-subject operations
  6. F) Exempt operations