A) General issues
Royal Decree-Law 3/2020 of 4 February on urgent measures transposing into Spanish law various European Union directives in the field of public procurement in certain sectors;private insurance;pension plans and funds;of the field of taxation and tax litigation, amends Law 37/1992 of 28 December 1992 on Value Added Tax with effect from 1 March 2020, incorporating the harmonised rules for taxation in the VAT of the so-called consignment sale agreements.
Consignment agreements are agreements between traders or professionals for the cross-border sale of goods, in which one trader (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 trader or professional (customer), who can purchase them at a later point in time after their arrival.
Until 1 March 2020, this transaction gave rise to a transfer of goods or a transaction treated as an intra-Community supply of goods in the Member State of departure of the goods, and to a transaction treated as an intra-Community acquisition of goods in the Member State of arrival of the goods, in both cases carried out by the supplier.
Subsequently, when the customer purchased the goods, the supplier made an internal supply in the Member State of arrival where the reverse charge rule applied and the customer was the taxable person.
From 1 March 2020, the new regulation provides that deliveries of goods made under a consignment sales agreement will give rise to a single transaction:an intra-Community supply of exempt 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 he removes the goods from the warehouse.
This simplified treatment shall apply only where the goods are acquired by the customer within one year of arrival in the Member State of destination.For these purposes, the date of acquisition shall be the date to be taken into account for the accrual of the respective intra-Community transactions.
In any case, entrepreneurs or professionals may choose not to take advantage of the simplification by not complying with the conditions for its application, in which case they would apply the general system in force until 1 March 2020.
This section analyses transfers of goods under consignment sale agreements and subsequent transactions, both where the goods are transferred from the territory of application of the tax to another Member State and, conversely, where the goods are transferred from another Member State to the territory of application of the tax.