They are deemed to be supplied in the territory where the tax applies:
Services related to immovable property where the property is located in the territory.
The following, among others, are considered to be related to immovable property: leases or transfers of immovable property, services for the preparation, coordination and execution of real estate works, technical services relating to such works, management services relating to immovable property or real estate operations, surveillance or security services, the rental of safe deposit boxes, the use of toll roads and accommodation in hotels, campsites and spas.
This includes notaries' intervention services in real estate transactions, mining exploration services and geophysical surveys.
In October 2015, the European Commission published on its website the document "Explanatory notes on the rules for the localisation of supplies of services linked to immovable property for the purposes of VAT". Although these Notes are not legally binding, they provide guidance on the practical application of the provisions contained in the above-mentioned articles of Council Implementing Regulation (EU) 282/2011 of 15 March 2011, applicable as of 1 January 2017, without the need for transposition into national law.
These Explanatory Notes contain both general and specific remarks concerning services linked to immovable property.Briefly, we can highlight the following:
"real estate" shall mean:
A specified area of the earth's crust, either on its surface or in its subsoil, on which ownership and possession can be based;
Any building or construction fixed to the ground, or anchored to the ground, above or below sea level, which cannot be easily dismantled or moved;
Any element which has been installed and forms an integral part of a building or construction and without which it cannot be considered complete, e.g. doors, windows, roofs, stairs and lifts;
Any item, equipment or machinery permanently installed in a building or structure, which cannot be moved without destroying or modifying the building or structure.
Services linked to immovable property as referred to in Article 47 of Directive 2006/112/EC, shall cover only those services which have a sufficiently direct link to the property in question.
Services shall be considered to have a sufficiently direct link to real estate in the following cases:
When they derive from immovable property and such property is a constituent element of the services and is basic and essential to them.
When they are provided in connection with or intended for immovable property and have as their object the physical or legal modification of such property.
Where machinery or equipment is made available to a customer for the execution of works on immovable property, such a transaction shall only be considered as a supply of services related to immovable property if the provider assumes responsibility for the execution of the works in question.
The carriage of passengers and the carriage of goods for which the recipient is not a trader or professional (other than those covered by Article 72 of the VAT Act), for the part of the journey carried out in the territory.
Thus, a bus transport of passengers from Seville to Paris is deemed to have been carried out in the territory where Spanish VAT applies for the part of the journey carried out in that territory, and not for the part of the journey carried out in France.
Access to cultural, artistic, sporting, scientific, educational, recreational or similar events, such as fairs and exhibitions and services ancillary thereto, provided that the recipient is a business or professional person acting as such and that such events actually take place in the aforementioned territory.
These services include all services that grant the right of access for a fee (entrance fee, payment, season ticket or season ticket or periodic contribution).It does not include the use of facilities such as fitness centres (Article 32 of Council Implementing Regulation 282/2011).
Ancillary services are considered to be those directly related to access, in particular the use of cloakrooms or toilet facilities, but not mere intermediary services relating to the sale of tickets (Article 33 of Council Implementing Regulation 282/2011).
Cultural, artistic or sporting services, fairs and exhibitions, other than access to them, provided to entrepreneurs or professionals, shall or shall not be located on the TAI, in the absence of a special rule, in accordance with the general rule laid down in Article 69.Uno.1º of the LIVA (consult DGT V1273-11).
Services provided by an event and congress organiser to other business people or professionals participating in a congress, to which it charges an entrance fee, are located in the territory of application of the tax to the extent that the congress actually takes place in the territory of application of the tax.
As we will see in point 7 of this section, also in the case where the recipient is a private individual and is not a businessperson or professional, the service must be located in the territory where the tax applies, provided that the congress takes place in this spatial area (DGT consultation V0010-16).
Those supplied by electronic means, telecommunications and radio and television broadcasting, when the recipient is not a businessman or professional acting as such, provided that he is established or has his habitual residence or domicile in the territory where the tax applies, in the following cases:
When the following requirements are met:
they are carried out by a trader or professional acting as such established solely in another Member State because he has there the seat of his economic activity, his only fixed establishment in the Community or the place of his permanent address or habitual residence;and
The limit provided for in Article 73 of LIVA has been exceeded or the option of taxation at destination provided for in has been exercised.
they are carried out by a trader or professional acting as such other than those referred to in the first indent of point (a) above.
Services provided electronically shall be deemed to be services provided electronically:
Those consisting of transmission sent initially and received at destination by means of processing equipment, including digital compression and storage of data, and entirely transmitted, conveyed and received by wire, radio, optical or other electronic means, including, but not limited to, the following:
The provision and hosting of computer sites.
Remote maintenance of programs and computers.
The supply of software and its updating.
The supply of images, text, information and making databases available.
The supply of music, films, games, including games of chance or gambling, political, cultural, artistic, sporting, scientific or entertainment broadcasts and events.
The provision of distance learning.
For these purposes, the fact that the provider of a service and the recipient of a service communicate by electronic mail does not, in itself, imply that the service is considered to be an electronically supplied service.
A private individual ordinarily resident in the taxable territory contracts with a US company for access to TV channels in the US.The American company should declare and pay Spanish VAT.
Restaurant and catering services in the following cases:
Those supplied on board a ship, aircraft or train in the course of the part of a passenger transport operation carried out in the Community where the place of departure is in the territory where the tax applies.
In the case of a return journey, the return journey shall be regarded as a separate transport operation.
Other restaurant and catering services where they are physically carried out in the territory where the tax is levied.
It will be considered:
Part of a passenger transport carried out in the Community: that part of a passenger transport operation which, without a stopover in a third country or third territory, runs between the place of departure and the place of arrival situated in the Community.
Starting point: the first scheduled place of embarkation of passengers in the Community, even after the last stop outside the Community.
Place of arrival: the last place agreed for disembarkation in the Community of passengers also embarking in the Community, even before another stop in a third country or territory.
Restaurant and catering services: the supply of food and/or drink for human consumption, provided that they are accompanied by ancillary services sufficient to permit their immediate consumption, so that such supply is only one element of a predominantly service-oriented package.Therefore, the supply of food or beverages without the provision of any ancillary services is not considered to be restaurant and catering services.
Mediation in the name and for the account of others, the recipient of which is not a trader or professional and provided that the transactions in respect of which mediation is carried out are deemed to have been carried out in the territory of application.
This special rule therefore applies only to services provided to private individuals, where the recipient is a business or professional person, the general rule of taxation at destination applies.
A Belgian real estate agency mediates the handover of a building to a private individual in Spain.The mediation transaction is understood to be carried out in the territory of application of the Spanish VAT .
A Spanish businessman mediates the sale of certain textile items found in China.The goods do not leave China.Nor is the intermediation transaction deemed to be carried out in the territory where Spanish VAT applies.
Mediation services provided by a commercial representative established in Spain to Italian companies without a permanent establishment in Spain, in relation to supplies from that country to third territories, are not considered to be supplied in Spanish territory, since the recipient is a trader or professional not established in the territory where the tax applies.
The following services where the recipient is not a trader or professional and they are physically provided on the TAI:
Services ancillary to transport such as loading and unloading, transhipment, handling and similar services.
Work and work carried out on movable tangible property and expert reports, valuations and opinions relating to such property.
Services related to cultural, artistic, sporting, scientific, educational, recreational, gambling or similar events, such as fairs and exhibitions, including the organisation of such events and other services ancillary to the above.
This special rule applies only to services provided to private individuals, in the event that the recipient is a business or professional, the general rule of taxation at destination applies, with the exception of access to cultural, artistic, sporting, scientific, educational, recreational or similar events, as referred to in point 3 above.
A German entrepreneur provides computer repair services to a Spanish private individual.The computers are installed in Spain and the service is effectively provided at the TAI.This service will therefore be taxed in Spain.
A Spanish businessman sends machinery to Germany for repair, which will then be sent back to Spain.The transaction will be subject to the Spanish VAT by application of the general rule.
An American singer gives a concert in Madrid, this is a supply of services carried out in the territory where the tax applies.
Those provided by electronic means, telecommunications, radio and television broadcasting, when the following requirements are met:
The recipient is not a trader or professional acting as such and is established, resident or habitually resident in another Member State;
They are carried out by a trader or professional acting as such established solely in the territory to which the tax applies because he has there the seat of his economic activity, his only permanent establishment in the Community or the place of his permanent address or habitual residence;and
The limit provided for in Article 73 of the LIVA has not been exceeded, nor has the option of taxation at destination provided for in been exercised.
The above provisions shall apply to services rendered during the current year until the quantitative limit indicated above has been exceeded.
Entrepreneurs or professionals may choose not to apply the provisions of this number, even if they have not exceeded the limit provided for in Article 73 of the LIVA.The option shall cover at least two calendar years, and the option must be reiterated after the two years have elapsed in order for it not to be considered revoked.
Telecommunication services shall be considered as telecommunication services:
The transmission, emission and reception of signals, texts, images and sounds or information of any nature by wire, radio, optical or other electromagnetic means, including the assignment or granting of a right to use the means for such transmission, emission or reception, and the provision of access to computer networks.
Radio and television broadcasting services shall be considered as broadcasting services:
Those services consisting of the supply of audio and audiovisual content, such as radio or television programmes supplied to the public over communications networks by a communications service provider, acting under its own editorial responsibility, to be listened to or viewed simultaneously in accordance with a programme schedule.
Leasing services of means of transport in the following cases:
Short-term leases where they are actually placed in the possession of the recipient in the said territory.
Long-term leases where the recipient is not a trader or professional acting as such, provided that he is established or has his domicile or habitual residence at TAI.However, in the case of hire of pleasure craft, the service shall be deemed to be supplied in the IAT when the craft are actually placed in the possession of the recipient in the territory of the IAT, provided that the service is actually supplied by a trader or professional from the place where he carries on his business or from a fixed establishment situated in the territory of the IAT.
Short-term shall mean
The continuous possession or use of means of transport for an uninterrupted period of not more than thirty days and, in the case of vessels, not more than ninety days.
How the duration of tenure or continued use is determined:
The contractual terms and conditions shall be observed.The contract shall constitute a rebuttable presumption.
When the leasing of the same means of transport is carried out through consecutive contracts between the same parties, the overall duration, including the contract and its extensions, shall be taken into account.
Short-term leases which, for reasons of force majeure, exceed the contractual duration will not have their duration altered for the purposes of determining their tax regime.
The following services, where they are not deemed to be supplied in the Community, the Canary Islands, Ceuta or Melilla, but are actually used or exploited in that territory:
The following services where the recipient is a trader or professional:
Assignments and grants of copyrights, patents, licences, trademarks and other intellectual or industrial property rights, as well as any other similar rights.
The assignment or granting of goodwill, exclusive purchase or sale rights or the right to exercise a professional activity.
Consultancy, auditing, engineering, research, law firms, lawyers, consultants, accountants, tax experts and other similar services, with the exception of those included in number 1 of section 1 of Article 70 of the VAT Law.
Data processing and the provision of information, including commercial procedures and experiences.
Translation, proofreading or typesetting services, as well as services provided by interpreters.
Insurance, reinsurance and capitalisation, as well as the financial services referred to respectively in Article 20(1)(16) and (18) of the VAT Law, including those that are not exempt, with the exception of the rental of safe deposit boxes.
Leases of tangible movable tangible property, with the exception of leases of any means of transport and containers.
the provision of access to natural gas networks situated within the territory of the Community or to any network connected to such networks, to electricity, heating or cooling networks, and of transmission or distribution through such networks, as well as the provision of other services directly linked to any of the services referred to in this point.
Obligations not to provide, in whole or in part, any of the services set out in this number.
Mediation services on behalf of a third party with an employer or professional acting as such.
Leasing of means of transport.
Those provided by electronic means, telecommunications, radio and television broadcasting.
Intra-Community transport services of goods which begin in the territory where the tax applies and the recipient is not a trader or professional.
The following definitions shall apply:
Intra-Community transport of goods: the carriage of goods whose place of departure and place of arrival are situated in the territories of two different Member States.
Starting point: the place where transport of the goods actually begins, without taking into account the journeys made to reach the place where the goods are located.
Place of arrival:the place where the transport of the goods is actually completed.
A German company buys goods from a Spanish company located in Zaragoza.
The transfer of these goods is to be made:
- Zaragoza-Barcelona by land transport.
- Barcelona-Munich by air.
The German company contracts the transport with a Spanish company, to which it communicates its VAT number as a German businessman, therefore, the transport service is not subject to the Spanish VAT by application of the general rule foreseen in Article 69.One.1º of the LIVA.
A French private individual buys some furniture on the Internet from a Spanish company based in Valencia, and the company takes care of the transport by road.These transports will be subject to Spanish VAT as they start at TAI and the recipient is a private individual.