The tax authority in Spain, Agencia Estatal de Administración Tributaria (AEAT), aiming to enhance the Immediate Supply of Information (SII) version 1.1, has introduced new validations and fields to the schema expected to be enforced from 1 January 2021.
The new fields will record the sales of goods in consignment (Venta de bienes en consigna) to comply with the requirement to register these operations in the system of the AEAT from 1 January 2021. This was established in the Spanish VAT Regulations (RIVA) and the Decree-Law 3/2020 which amended the domestic VAT Law.
These changes were adopted in the Spanish legal framework to simplify rules for the sale of goods in consignment or call-off stock as part of the “Quick Fixes” outlined in the Council Directive (EU) 2018/1910 into the domestic laws and regulations.
New VAT rules for the sale of goods in consignment
According to the current VAT rules, moving goods from one Member State to a warehouse located in another is deemed to be an exempt intra-community supply in the Member State of departure of the goods. At the same time, this business must account for VAT on the intra-community purchase of goods in the Member State where the goods arrive. Apart from declaring an intra-community acquisition of goods, this taxable person must normally account for the VAT on the (domestic) supply in the Member State where the stock is located, transferring and later supplying these goods.
With the adopted Quick Fixes, no intra-community supply and no intra-community acquisition take place at the time of dispatch of the goods to the warehouse located in another Member State; only an exempt intra-community supply in the Member State of departure and a taxed intra-community acquisition in the Member State where the stock is situated is deemed to be made when the acquirer takes ownership of the goods.
Conditions of applicability
Taxpayers wishing to benefit from these simplified rules for the sale of goods in consignment must fulfil the conditions provided for its application, which are the following:
- The supplier must not have a permanent establishment in the Member State of arrival
- The business person or professional for whom the goods are intended, must have a tax identification number (N-VAT) in the Member State of arrival
- The supplier must know the N-VAT of the business person or professional for whom the goods are intended, when the goods are dispatched
- The goods are transported to a Member State, which must be established in the consignment sales agreement
- The supplier must include the shipment of the goods in the ledger of certain intra-community operations and form 349
- The purchaser “calls-off” the goods within 12 months
The taxable person for whom the goods are intended, must register the operation in the book of certain intra-community operations and provide the supplier’s identification, the description of the goods and the date. If they take over the storage of the goods, they must also register additional information.
With this new version, Spain extends the SII scope and paves the way to adopt a more efficient Continuous Transactions Control (CTC) system that doesn’t seem to end with this new requirement. The next step for the Spanish Government is to develop an efficient way to prepopulate VAT returns widely adopted in the country. Currently, the first version of the “Pre303” is only available for certain taxpayers; however, this initiative will eventually expand to cover all businesses in the country.
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