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VAT and the use of warehouses and storage facilities in Spain by foreign companies for the sale of goods
Businesses are increasingly using warehouses spread across one or more countries as a global strategy for the distribution of their products. The question that arises is whether these companies are established in Spain from a VAT point of view, as this would affect the way they need to invoice.
In this case, a foreign company sells goods stored in a warehouse in Spain to another foreign company, which in turn sells them to a Spanish company (call-off-stock). Neither of the two foreign companies are established in Spain from the VAT point of view. The end client is Spanish tax resident.
The first conclusion is that the three sales operations described above are subject to Spanish VAT, as the goods are stored in Spain from the beginning. The first European company selling the goods in storage to another non-established company will be unable to charge Spanish VAT (output VAT), for it is not established in Spain – as it does not have leased premises in Spain, for example. Therefore, the company buying the goods in Spain, which also does not have leased premises in this country, will need to declare the Spanish VAT on the purchase through the reverse charge mechanism; however, when reselling the goods in storage to the Spanish company, no output VAT should be applied to this invoice.
Similarly, the Spanish company that ultimately acquires the goods will need to declare VAT through the reverse charge mechanism, as the second selling company also cannot apply Spanish VAT to their invoice. The two European companies based outside of Spain will need a Spanish tax number to deal with goods stored in Spain and issue invoices with no Spanish VAT.
The sequence of purchase and sale operations of the goods stored in Spain requires adequate VAT planning and, in each case, the tax returns to be submitted will be different. Besides, if the intermediary company has also input VAT in Spain, it will be able to request a refund through the procedure for established taxable entities.
Through this transaction, and provided that all other requirements are met, the final purchaser will also have a short-term cash-flow advantage, as it will not bear input VAT on purchases.