Sales from the Spanish warehouse to other European Union countries
The establishment of a Consignment Stock in Spain is usually motivated by the advantage it offers to the Spanish customer, providing proximity to the warehouse and ensuring fast delivery.
In the Automotive sector, the use of Consignment Stock in Spain is typically driven by “Just in Time” requirements.
The fact that Spain is close to France and Portugal creates opportunities to use the Spanish Consignment Stock for deliveries to customers in those countries.
It is not prohibited to take advantage of the Consignment Stock in Spain for deliveries to other EU countries, but sales from the Spanish warehouse to other EU countries will require a modification to the applicable VAT regime, specifically concerning the VAT refund regime for entities not established in Spain.
When goods are shipped from the Consignment Stock in Spain to destinations abroad, the Italian company identified in Spain will no longer be able to request a VAT refund paid in Spain through the system provided by the EU Directive. Instead, it will be required to follow the VAT refund system specified by Spanish VAT law.
This issue may arise in cases where the Italian company owning the Consignment Stock in Spain pays VAT in Spain for services such as participation in fairs or other similar cases. The solution, in our view, is to anticipate this scenario and adjust to the Spanish internal VAT refund system in a timely manner.
