VAT Treatment of Deposits in Agricultural Machinery Contracts: DGT Clarifies When Subject to VAT

• The initial constitution of a deposit (fianza) in agricultural machinery manufacturing contracts is not subject to VAT, as it does not constitute payment for goods or services.
• If the deposit is later applied to the final price, it becomes subject to VAT as an advance payment for the main transaction.
• This distinction aligns with previous administrative doctrine, reinforcing the difference between a guarantee and an advance payment for VAT purposes.
• The manufacturer is considered a business entity for VAT purposes.
• The DGT’s response consolidates prior criteria used in rental agreements, applying the same logic to manufacturing contracts.

Source: allyon-etl.es

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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