Deliveries of goods and provision of services

The Law establishes two fundamental rules:

• The tax is accrued when the transaction is carried out.

• When there are advance payments prior to the execution of the transaction, the tax is accrued at the time of full or partial collection of the price for the amounts actually received (except in the case of exempt deliveries for being destined for another Member State).

The amounts retained by the recipient of the work as a guarantee of the correct execution of the work are not considered to have been effectively collected.

To determine the moment in which the taxable event is deemed to have occurred, the Law distinguishes between different operations:

1. Deliveries of goods: when they are made available to the purchaser or, where applicable, when they are carried out in accordance with the legislation applicable to them.

   It is irrelevant whether the payment is made later. Therefore, in the case of installment sales, the tax is due in full when the delivered goods are made available to the purchaser, even if the installments are met later.

   When a public deed is granted, the provision is deemed to have been made available, by legal provision, at the time of its granting. However, if the deed indicates a different time for the provision of the item, the accrual will occur when the provision takes place.

   In the case of deliveries of goods made without any transfer of ownership (sales contracts with a reservation of title agreement or other suspensive condition, lease-sale of goods or lease of goods with a transfer of ownership clause binding on both parties), accrual occurs when the goods are placed in the possession of the purchaser.

2. Provision of services: when the taxed operations are provided, executed or carried out, unless they are continuous operations described in the second paragraph of article 75.One.2 of the LIVA .

   Example:

   The VAT of the services provided by lawyers and solicitors in the course of a judicial procedure is accrued when the performance of the service is completed, that is, when the procedure is concluded (except for advance payments).

3. In the executions of works with contribution of materials, the accrual occurs at the time when the goods to which they refer are made available to the owner of the work.

4. In executions of works with or without contribution of materials , whose recipients are the public administrations, at the time of receipt.

   Example:

   Businessman who carries out two works with the contribution of material, one for another businessman and another for a public administration:

   • When the recipient is another business, accrual occurs at the time the work is made available to its owner.

   • When the recipient is a public administration, accrual occurs at the time the work is received and not at the time the work is made available to its owner. All this without prejudice to the fact that, if there have been advance payments, the VAT is accrued at the time of collection thereof and on its amount.

5. Transfers of assets between the principal and the commission agent carried out under sales or purchase commission contracts when the commission agent acts on his own behalf:

   • In the sales commissions: The VAT corresponding to the delivery from the principal to the commission agent is accrued when the commission agent delivers the goods to the client.

   • In the purchase commissions: The VAT corresponding to the delivery from the commission agent to the principal is accrued when the supplier delivers the goods to the commission agent.

6. In the case of deliveries of goods made under contracts by which one of the parties delivers to the other movable property, the value of which is estimated at a certain amount, obliging the recipient to procure its sale within a period and to return the estimated value of the goods sold and the rest of those not sold, the accrual of the deliveries of the goods sold will occur when the recipient makes them available to the purchaser.

7. In the case of self-consumption, when the taxable transactions are carried out.

8. In leases, supplies and, in general, in operations of successive or continued performance, at the time when the part of the price that includes each perception becomes due.

   Examples:

   Gas supply, electricity supply, leasing.

   In the case of leases, non-payment of rent does not prevent the obligation to pay the tax, because the tax will continue to accrue each time the rent payment is due.

   However, when no price has been agreed or the time of its enforceability has not been determined , or the enforceability is greater than one calendar year , the accrual will occur on December 31 of each year for the proportional part corresponding to the period elapsed since the start of the operation, or since the previous accrual, until the aforementioned date.

   Example:

   In the case of a lease of premises in which it is stipulated that the rent will be paid at the end of the lease and it has a duration of 4 years, the accrual will occur on December 31 of each year, not every 4 years.

   When the supplies constitute exempt intra-Community supplies of goods (article 25.One of LIVA ) or exempt transfers of tangible assets of a company destined for another Member State, to affect them to the needs of the company in this State (article 25.Three of LIVA), if the price has not been agreed, or the moment of exigibility has not been determined or it has been established with a periodicity greater than the calendar month, the accrual of the Tax will occur on the last day of each month for the proportional part corresponding to the period elapsed from the beginning of the operation, or from the previous accrual, until the aforementioned date.

9. In the case of exempt intra-Community supplies of goods, other than those in letter h) above, the accrual will occur on the 15th of the month following that:

   • On which the dispatch or transport of the goods to the purchaser begins, or on the date of issue of the invoice if earlier.

   • At the time the goods are made available to the purchaser in deliveries of goods under an agreement for the sale of goods on consignment or on the date of issue of the invoice for such operations, if earlier.

   • At the time when non-compliance with the conditions referred to in section three of article 9 bis of the LIVA occurs.

   • The day after the expiry of the period of 12 months from the arrival of the goods in the Member State of destination without any trader having acquired them under a consignment sale agreement. (Amendment introduced by article 214 of Royal Decree-Law 3/2020, of February 4 ( BOE of 5), applicable from March 1, 2020).

10. In the deliveries of goods made under the terms provided for in article 8 bis of the LIVA , the accrual of the tax on the delivery made in favor of the businessman or professional who facilitates the sale or delivery, as well as the one made by the same, will occur with the acceptance of the client's payment.

11. In the operations of leasing, the accrual occurs:

    • Before there is a commitment to exercise the purchase option, the transaction is considered a leasing service and the tax is accrued as each payment becomes due.

    • When there is a commitment to exercise the option, the transaction is considered a delivery of goods and tax is accrued on the amount remaining to be paid.