B Law & Tax
16 May 2023

Tax Advisor: Changes in the VAT Law and in the Excise Taxes Law

On May 9th, 2023, Law 11/2023 of May 8th was published in the Official State Gazette (BOE), which transposes the European Union Directives regarding the accessibility of certain products and services, the migration of highly skilled individuals, taxation and the digitalization of notary and registry processes. Also, an amendment is made to Law 12/2011 of May 27th, regarding civil liability for damages caused by radioactive or nuclear materials.

The following are the main novelties that have been incorporated to the mentioned taxes:

As regards Value Added Tax, a Title III has been included which will enter into force on January 1st, 2024 and which contains an article (Article 33) transposing Directive 2020/284. This Directive amends Directive 2006/112/EC and establishes certain requirements for payment service providers. In order to adapt to this new regulation, a reform of Law 37/1992, of December 28th, 1992, on Value Added Tax (LIVA) has been carried out. The purpose of this reform is to “systematize those obligations that affect all taxpayers of the specific obligations derived from electronic commerce”.

Title V of the Law, which entered into force on May 10th, 2023, focuses on excise taxes. This title includes two articles (article 40 and 41) that aim to transpose Council Directive (EU) 2020/262 and Council Directive (EU) 2020/1151. The former Directive establishes the general excise duty regime, while the latter amends Directive 92183/EEC as regards the harmonization of the structures of excise duties on alcohol and alcoholic beverages. In order to comply with these Directives, amendments have been made to Law 38/1992 on Excise Duties (LIE) and to the Regulation on Excise Duties, approved by Royal Decree 1165/1995, of July 7th (RIE).

What are the main novelties in the excise law and regulations?

– Changes in the circulation of products that are subject to excise duties after free practice office – Two new operators called “Certified consignee” and “Certified consignor” have been incorporated. These are the only ones authorized to receive or ship excisable products through the use of the computerized procedure of guaranteed shipments.

– In the context of the distance selling system, the term “seller” has been replaced by “consignor”. This expands the list of persons who may ship excise goods within this system.

– To allow the use of the external transit regime after the export regime, the customs office of departure has been included as a possible destination of a movement under excise duty suspension arrangements.

– A new taxable event called “irregular entry” has been incorporated, which is defined in Article 4 as the arrival of goods in the territory of the Union without being included in the system of release for free circulation and having incurred a customs debt. The intention of the legislator is clear: excisable products entering the territory of the Union will be subject to manufacturing taxes, whether they have arrived in accordance with customs regulations or irregularly.

– It is determined that irregular manufacture will be subject to taxation, when it does not meet the conditions set forth in the Excise Tax Law.

– Clarification is made regarding possible irregularities that may arise during the circulation of products under a duty suspension arrangement.

– Clarifications are provided in relation to situations of loss during transport between the territories of the Member States in two specific cases: partial losses caused by the nature of the products and total destruction or irretrievable loss, total or partial.

– One of the main modifications consists in extending the use of the computerized system currently used for the movement of excise goods under suspension of excise duty to the movement of excise goods that have been released for consumption in one Member State and are moved to the territory of another Member State for the purpose of being placed on the market there.

– New file validated as a movement document.

– Implementation of a temporary transition regime for products that have been shipped according to the previous regulation.

– Establishment of the rules and processes for exempting the armed forces of member countries that participate in activities within the common security and defense policy.

– A minimum list of evidences to leave the territory of the Union by different routes is created.

– The option to change the receiver by means of the EMCS while the circulation is in progress under the suspensive regime is added.

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