Intra-Community VAT: Triangular Operations & Taxable Events

Triangular Operations in Intra-Community Acquisitions

These operations involve companies from three different EU member states. They consist of:

• A director company buying and selling, which must be a company not established in Spanish territory.
• A supplier that only sells, transports, and delivers the goods.
• A buying company that only acquires the property, which is the Spanish company (in this context).

Regarding the triangulated company, it must be a company not established in the EU and will have these three characteristics:

1. It performs two actions: it buys from one company and sells to another.
2. It benefits from a Community exemption on the purchase.
3. Its relationship with the Spanish company can be expressed as: "I will buy the goods to sell them to you."

Finally, it should be noted that the acquisition by the triangular company (the Spanish one) will occur with the reverse charge mechanism, as per Article 84 of the VAT Act.

Place of Taxable Events for Intra-Community Acquisitions

What are considered intra-Community acquisitions made in Spanish territory?

1. Those where the place of dispatch or transport is within Spanish territory.
2. Those where the acquirer has provided the vendor with an identification number for VAT purposes assigned by the Spanish administration.

Accrual, Taxpayers, and Tax Base in Intra-Community Transactions

The accrual of intra-Community acquisitions follows the same rules as the accrual for the supply of goods. However, rule 75.2 applies to advance payments made before the chargeable event.

The taxpayer (Article 85) is the one who makes the purchase. The buyer may be an employer or a legal person who does not have the status of an entrepreneur but is the buyer.

Regarding the tax base (Article 82), the same rules as for the supply of goods apply to intra-Community acquisitions.

Deduction of VAT on Intra-Community Acquisitions

For the buyer, the VAT on intra-Community acquisitions is a deductible fee.

Regarding formalization, upon receiving the invoice, the employer has a duty to calculate the fee and record it in the book of invoices received, based on the price of the goods.

The history of the regulation of deductions can be divided into two stages: before and after 1995:

• In the first stage, the accrual of the acquisition occurred in one period, and the deduction was applied in the following period.
• This was modified in 1995, and thereafter, the accrual period of the acquisition and the deduction period were made concurrent.

Example Calculation

• Delivery VAT payable: 1000
• Intra-Community acquisitions: +100
• VAT on delivery of goods: -800
• Intra-Community acquisition: -100
• VAT to be paid: 200