When an accessory transaction follows the VAT treatment of the main one?


Binding tax ruling V1320-16 issued by the Spanish General Tax Directorate on March 31st 2015.

The consultant entity is a company established in the Spanish VAT Territory which is aimed to the delivery and installation of tires. In particular, it carry out 3 different transactions:

1.   Delivery and installation of tires in the own workshop.

2.   Delivery of tyres without installation or transport them.

3.   Delivery of tyres to companies or entrepreneurs established in other EU Member States or in Third Countries.


1.     Delivery and installation of tires in the own workshop.  

In relation with the first of the transactions, delivery and installation of tires in the own workshop, it must be determined if under this scenario we have a single transaction, one operation main and another the accessory to it; or conversely, are two different transactions, this is a delivery of goods and the rendering of independent services for VAT purposes.

Consideration of the transaction as a single one or as two independent transactions is very important for example to determine the place of location, possible VAT exemptions or to determine the applicable tax rate.

At this point the Spanish General Tax Directorate relies on the judgment of 25 February 1999, of the European Court of Justice in case C349/96, in which that Court was raised which should be the criteria for deciding, in the field of VAT, if an operation that is composed of several elements should be considered as a unique feature or two or more different transactions that must be valued separately.

This decision mentions that although on the one hand, the EU VAT Directive suggests that each provision of service or delivery of goods normally should be regarded as distinct and independent, on the other, the transaction constituted by a single service from the economic point of view, should not be artificially breakdown to not alter the functionality of the VAT system. Therefore, it is important to find the characteristic elements of the controversial operation to determine if the taxable person carries out for the client several different transactions or a single one.

Therefore, if there is a provision of services accessory with respect to a supply of goods, carried out both for a same recipient, the provision of services will not be taxed by VAT independently, they will follow the same treatment that corresponds to the main operation of which depends on.

In this case, means that the supply of the tires are the main transaction, being the assembling of the tires an accessory operation to the main, by which the whole operation will be treated as a single transaction which is the delivery of the tyres. Locating this in the Spanish VAT Territory since tires are put at the disposal of the client in the workshop without any transportation.

In this way, ancillary activities will remain the same VAT treatment that the activities on which they depend. Both operations will follow the treatment of the main transaction, which is the delivery of the tyres, being located in the TAI and therefore subject to VAT, no exemption is not applicable.

2.     Delivery of tyres without installation or transport them.

The treatment of this transaction, without installation or transportation of tires, has no difficulty, being this supply of goods subject and not exempt of VAT, and taxed at 21%.

3.     Delivery of tyres to businessmen or professionals established in other Member States or in third territories.

With respect to these supplies of goods, the Spanish Authorities has determined that the consultant has not duly proved the transport of the tyres to the country of reception, so supplies of tyres won’t understand exempt of VAT.

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CV 1320 16

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