Skip to main content

Criterion on the calculation of the VAT taxable base for discounts on car sales

Given its relevance, information is provided on the criteria issued by the Central Economic Administrative Court (TEAC) in relation to the VAT tax base and discounts on automobile sales that, in part, are borne by the financial entity that grants the financing.

TEAC ruling no. 00/04177/2018/00/00, dated 21 October 2020, in accordance with the criteria indicated by the CJEU in its rulings of 15-5-2001, case C-34/99, Primback and 16-1-2014, case C-300/12, Ibero Tours, considers that the discounts granted by dealers in the sale of financed cars, paid by the financial institution, do not reduce the taxable base of the vehicle sale as the amount obtained by the dealer is the same when financed and when not.

In the case of financing, there is a part of the consideration that is paid by a third party, in this case, the financial institution, a payment by a third party that has to form part of the taxable base according to Article 78.1 of the VAT Law. 

The foregoing is independent of whether there is financial intermediation work by the concessionaire to which the exemption applies in accordance with article 20.One.18 of the LIVA.