VAT on intra-community acquisitions: Application and exemption of Article 14.2 of Spain’s VAT Law

This rule applies to legal persons who do not act as entrepreneurs or professionals; taxpayers under the special regime for agriculture, livestock and fishing; and individuals who are not entrepreneurs or professionals. The exemption only applies if the total amount of intra-community acquisitions made in the previous calendar year did not exceed EUR 10,000. This threshold is calculated on the basis of all such acquisitions and cannot be avoided by splitting operations.

As long as the threshold is not exceeded and the exemption has not been waived, the supplier will normally charge the VAT of its own EU member state. However, Article 14.4 allows taxpayers to waive this exemption voluntarily for a minimum period of two years. This may be beneficial where the Spanish VAT rate is lower than the VAT rate in the country of origin.

If the EUR 10,000 limit is exceeded, Spanish VAT becomes due from the transaction that causes the threshold to be surpassed. It does not apply only to the excess. From that moment, each subsequent intra-community acquisition in the same calendar year is fully subject to Spanish VAT.

The way VAT is declared depends on the entity involved. Form 303 is used by entrepreneurs or professionals entitled to deduct VAT. Form 309 is used by non-business entities without deduction rights. In both cases, Form 349 must also be filed as an informative return for intra-community transactions.

For example, if an NGO purchases goods worth EUR 4,000 in January, EUR 3,000 in March, and EUR 5,000 in June, the June transaction causes the threshold to be exceeded. As a result, the entire June purchase is subject to Spanish VAT, not only the amount above EUR 10,000.

Certain goods are always taxed in Spain regardless of the threshold, including new means of transport and products subject to excise duties, such as alcohol, tobacco, and hydrocarbons.

This rule can simplify compliance for non-business entities, but the threshold must be monitored carefully.

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Javier has a degree in Business Management from the University of Malaga. With over 23 years of experience, he specialises in accounting and tax consultancy for individuals and companies across various sectors. He continuously enhances his expertise.