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VAT 2023 practical manual.

2. Effective use rule

modifies the rule of effective use whose application allows the subjection in the territory of application of the tax (TAI) of the provision of services that according to the rules referring to the place of realization of the taxable event, are understood to be carried out outside the Community, Canary Islands, Ceuta or Melilla, but its effective use occurs in said territory, in the following terms:

  1. Effective January 1, 2023:

    • In cases of provision of services between entrepreneurs and professionals , its application is suppressed in those sectors and activities with the right to deduct contributions, maintaining , (until May 26, 2023), in sectors that do not generate such a right, such as the financial and insurance sector. Likewise, is maintains in transportation leasing services.

    • In cases of provision of services to final consumers , extends its application to the provision of intangible services.

  2. With effect from May 26, 2023, in cases of provision of services between businessmen and professionals , its application to financial operations is excluded and insurance.