Geographical scope

These statistics include transactions carried out within the scope of the tax. Section one of article 3 of Law 37/92 on Value Added Tax establishes the Spanish territory as the spatial scope of the tax, including the adjacent islands, the territorial sea up to the limit of twelve nautical miles and the airspace corresponding to said territory. Section two of Article 3 of this Law includes, as exclusions from the scope of the tax, operations carried out in the Canary Islands, Ceuta, and Melilla.

The tax regulations establish specific rules governing the special territorial regime affecting the historical territories of the Basque Country and the Autonomous Community of Navarre.

In these cases, the tax will be charged in accordance with the provisions of this VAT Law and the regulations governing the current Economic Agreements and Contracts regimes. The basic conditions for applying the tax are:

• When transactions amounting to less than €7,000,000 are carried out in the previous fiscal year, tax will be paid exclusively in the territory where the tax domicile is located, regardless of where the transactions are carried out.
• When the figure of 7,000,000 euros is exceeded in the previous year and the company operates exclusively in one territory, it will be taxed there, regardless of its tax domicile.
• When the figure of €7,000,000 is exceeded in the previous year and operations are carried out in both territories, each tax authority will be taxed in the proportion that each represents in relation to the total, regardless of where they have their tax domicile. In this case, the annual summary VAT return must include all of your transactions for the calendar year.

As a result of the above, the annual summary tax returns will not include the transactions of those subjects who pay taxes exclusively to the Regional Governments of the Basque Country and Navarre.