Spanish VAT treatment of the tax payer in the supply of smart watches


Binding tax ruling V4576-16, issued by the Spanish General Tax Directorate on October 26 2016.

A company carries out imports of technological products (mobile phones, accessories for them, “smart watches”, etc.) in the Spanish VAT Territory for its subsequent sale, and wants to know if on “smart watches” it applies the reverse charge rule.

At this point it should be remembered that, with effect from 1st April 2015, Article 84.Uno.2nd of the Spanish VAT Law was amended, including a new letter g) which establishes new reverse charge rule cases.

Thus, the new wording of article 84 of the Spanish VAT Law establishes that:

 “One. Shall be considered as VAT tax payer:


 2º. The entrepreneurs for whom the transactions subject to VAT are carried out in the following assumptions:


 g) In the case of supplies of the following products defined in section tenth of the annex of this Act:

 – (…)

 – Mobile phones.

 – Videogame consoles, laptops and digital tablets.

 The provisions of these last two indents apply only when the addressee is:

 a’) An entrepreneur or professional reseller of these goods, whatever the amount of the delivery.

 b’) An entrepreneur or professional other than those referred to in the previous letter, when the total amount of supplies of said goods made to the same, documented in the same invoice, exceeds 10,000 euros, excluding VAT.

… “

Among the nomenclature codes included in the Tenth Schedule of the Spanish VAT Law there is no one in which “smart watches” can be framed and, therefore, this Body concludes that only would apply the reverse charge rule in the deliveries of mobile phones, videogame consoles, laptops and digital tablets, but not in relation to the supplies of “smart watches”.

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