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VAT practical manual 2022.

A) General issues

Royal Decree-Law 3/2020, of February 4, on urgent measures by which various directives of the European Union in the field of public procurement in certain sectors are incorporated into the Spanish legal system; of private insurance; of pension plans and funds; of the tax field and tax litigation, modifies with effect from March 1, 2020, Law 37/1992, of December 28, on Value Added Tax, incorporated into our internal regulations the harmonized tax rules in VAT of the so-called agreements for the sale of goods on consignment.

Consignment sales agreements are agreements concluded between businessmen or professionals for the cross-border sale of goods, in which a businessman (supplier) sends goods from one Member State to another, within the European Union, to be stored. in the Member State of destination at the disposal of another businessman or professional (client), who can acquire them at a time after their arrival.

Until March 1, 2020, this operation gave rise to a transfer of goods or an operation assimilated to an intra-Community supply of goods in the Member State of departure of the goods, and to an operation assimilated to an intra-Community acquisition of goods in the Member State of arrival of the goods, carried out in both cases by the supplier.

Subsequently, when the client acquired the goods, the supplier made an internal delivery in the Member State of arrival in which the reverse charge rule applied, such condition corresponding to his client.

Since March 1, 2020, the new regulation establishes that deliveries of goods made within the framework of a consignment sales agreement will give rise to a single operation: an exempt intra-Community supply of goods in the Member State of departure, carried out by the supplier, and an intra-Community acquisition in the Member State of arrival, carried out by the customer when removing the goods from the warehouse.

This simplified treatment will only apply when the goods are acquired by the customer within a period of one year from their arrival in the Member State of destination. For these purposes, the acquisition date will be the one that must be taken into account for the purposes of the accrual of the respective intra-community operations.

In any case, business owners or professionals may choose not to benefit from the simplification by failing to comply with the conditions established for its application, in which case they would apply the general regime in force until March 1, 2020.

This section analyzes the transfers of goods within the framework of consignment sales agreements and subsequent operations, both in the case in which the goods are transferred from the territory of application of the Tax to another member state, as in the opposite case, when the goods are transferred from another member state to said territory.