VAT on Import and Export Transactions: Key Points for Tax Advisers

Introduction

Value Added Tax (VAT) in international trade is one of the most complex and fundamental areas for tax advisers. Import and export transactions have their own tax implications and also affect the financial, logistical and documentary management of companies operating internationally.

1. Applicable legal framework

• Spanish VAT Law 37/1992 of 28 December and its implementing regulations.

• Regulation (EU) No 952/2013 establishing the Union Customs Code (UCC).

• Directive 2006/112/EC on the common system of VAT.

2. VAT on imports: scope, chargeability and deduction

2.1 Taxable person and taxable amount

• An import is the entry of goods from a non-EU country.

• The taxable person is the importer, who is usually also the customs declarant.

• The taxable amount includes:

  • The customs value (CIF value).

  • Customs duties.

  • Taxes other than VAT charged at customs.

  • Incidental expenses up to the first destination in Spain (transport, insurance, etc.).

2.2 Chargeable event and payment of import VAT

• VAT becomes chargeable when the goods are released for free circulation.

• Since 2015, certain operators may opt to defer import VAT under Article 167(2) of the VAT Law and include it in their monthly Form 303 return, instead of paying it at customs. This option is available to importers registered for monthly VAT refunds (REDEME) and large companies.

2.3 Deducting input VAT on imports

• Where the goods are used for a taxable, non-exempt business activity, VAT paid or deferred on the import may be deducted in the relevant period.

• Maintain a clear accounting and documentary audit trail, including the Single Administrative Document (SAD/DUA), commercial invoice and proof of payment.

3. Exports of goods: exemption with a right to deduct

3.1 Requirements for the exemption (Article 21 of the VAT Law)

• The goods must be sent outside the territory of the European Union.

• There must be evidence of exit, such as a duly validated export customs document.

• There must be a direct link between the seller and the transaction.

3.2 Nature of the exemption: full exemption

• The seller may deduct input VAT on purchases linked to the export.

• This does not affect VAT refunds for exporters under the equivalence surcharge scheme or those who are exempt.

3.3 Indirect exports and chain sales

• Pay particular attention to the involvement of logistics operators, freight forwarders and commission agents.

• Determine which party carries out the dispatch and retains control over the transport.

4. Intra-EU and non-EU trade: a comparison

• In intra-Community acquisitions, VAT is not charged at the border, but the purchaser must self-account for VAT under Article 84(1)(2) of the VAT Law.

• The intra-Community operator must be listed in the Register of Intra-Community Operators (ROI/VIES) and state the supplier’s and customer’s VAT identification numbers.

• Exports outside the EU may be exempt under Article 21 of the VAT Law, but they require more extensive documentary evidence.

5. Recent developments and case law

• The July 2021 e-commerce VAT package affected the importation of low-value consignments and introduced the Import One-Stop Shop (IOSS).

• The One-Stop Shop systems (OSS/IOSS) simplify distance sales.

• Recent case law from the Court of Justice of the European Union and the Spanish Supreme Court should be assessed carefully on a case-by-case basis. Specific references are not included without prior documentary verification.

6. Good practices for tax advisers

• Thoroughly review import and export SAD/DUA documents and invoices.

• Maintain rigorous documentation: invoices, transport documents, contracts and customs declarations.

• Check that the zero rate or exemption has been correctly applied and is consistent with the accounts.

• Assess whether deferring import VAT is appropriate.

• Keep up to date through official sources: the Tax Agency, the Official State Gazette (BOE) and the Official Journal of the European Union (OJEU).

Conclusion

Correct VAT treatment of international transactions requires deep, up-to-date technical knowledge. A tax adviser plays a key role in preventing risks and optimising companies’ cash flow. Proper tax planning and efficient document management help businesses use the current rules, avoid contingencies and protect taxpayers’ legal certainty in transactions with non-EU countries.