The Value Added Tax (VAT) exemption for the Military Forces, as established in Article 477 of the Tax Statute and the customs concept number 100208192-107 of 2021, is not limited solely to direct purchases made by the Military Forces. This exemption can be extended to individuals who acquire goods and services on behalf of these institutions. However, it is necessary to understand that this extension is not automatic and is subject to specific conditions, also in line with concept 100208192-724 of 2024, which states:

“Regarding this exclusion, the official interpretation since 2003 (Unified VAT Concept No. 00001) indicates that for its applicability, the import must be carried out by an entity legally in charge of National defense, either directly or through a third party acting on its behalf, taking into account that the tax benefit operates by reason of its destination.”

Conditions for the Application of the Exemption

1. Exclusive Destination “National Defense”: The determining factor for this exemption is the final destination of the acquired goods and services. They must be unequivocally intended for the exclusive use of the Military and Police Forces.
2. Specific Purpose “Authorized Entity”: The goods and services must be aimed at national defense and be for the private use of the Military and Police Forces.
3. Official Certification “Ministry of Defense Certification”: A certification issued by the competent authority, in this case, the Ministry of Defense, is required. This document is crucial to validate and prove the legitimacy of the exemption and will be the supporting document that demonstrates the final destination of the products.
4. Limited and Specific Import Flexibility: The import of goods can be carried out directly by an entity legally in charge of national defense or through third parties acting on their behalf, duly demonstrated in contracts or supporting certifications.

For individuals or companies acting on behalf of the Military Forces, it is essential to maintain clear documentation demonstrating that the final destination of the acquired goods and services is indeed intended for national defense and that, as third parties, they are directly linked to the process.

For the import of weapons, ammunition, and war or reserved material, and consequently for private use, the following elements belonging to the Military Forces and National Police shall be understood:

1. Weapon systems and major and minor armament of all types, models, and calibers with their accessories, spare parts, and necessary elements for shooting instruction, operation, handling, and maintenance.
2. All types of ships, naval artifacts, and aircraft intended for the service of the National Defense Branch, with their accessories, spare parts, and other elements necessary for their operability and functioning.
3. Ammunition, torpedoes, and mines of all types, classes, and calibers for weapon systems and major and minor armament used by the Military Forces and National Police.
4. Armored material.
5. Livestock of all classes and breeds intended for maintaining internal or external public order.
6. Explosive and pyrotechnic materials, raw materials for their manufacture, and accessories for their use.
7. Parachutes and jumping equipment for Airborne Units, including those necessary for their maintenance.
8. Anti-riot elements, equipment, and accessories.
9. Combat engineering equipment with its accessories and spare parts.
10. Diving equipment and underwater blasting gear, their spare parts, and accessories.
11. Aerial, surface, and underwater detection equipment, their accessories, spare parts, tuning, and calibration equipment.
12. Fire and damage control elements, their accessories, and spare parts.
13. Tools and equipment for testing and maintenance of war or reserved material.
14. Communication equipment and other implements for use by the Military Forces and National Police.
15. Other elements applicable to the service and manufacture of war or reserved material.

We recommend a detailed analysis of the supporting documents that substantiate the final destination of weapons and ammunition imports made for national defense, as the tax statute contemplates a special consideration of non-causation of sales tax.

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