Special rules

The following are considered to be provided in the territory of application of the tax:

Services related to real estate when it is located in the territory.

The following are considered to be related to real estate, among others: leasing or transfer of the same, services for the preparation, coordination and execution of real estate works, technical services related to said works, management services related to real estate or real estate operations, surveillance or security services, safe deposit box rental services, the use of toll roads and accommodation in hospitality, camping and spa establishments.

Example:

This section includes the services of Notaries involved in real estate transactions, mining exploration or geophysical surveys.

In October 2015, the European Commission published on its website the document “Explanatory notes on the location rules for the provision of services linked to real estate for the purposes of VAT ”. Although these Notes are not legally binding, they constitute an instrument of guidance on the practical application of the provisions contained in the cited articles of the Implementing Regulation ( EU ) 282/2011 of the Council, of 15 of March applicable as of January 1, 2017, without the need for transposition to the internal standard.

These explanatory notes contain both general and specific observations in relation to services related to real estate. In summary, we can highlight the following:

By "real estate" shall mean:
1. A definite area of the earth's crust, whether on its surface or subsoil, in which property and possession may be founded;
2. Any building or construction fixed to or anchored in the ground above or below sea level, which cannot be easily dismantled or moved;
3. Any element that has been installed and forms an integral part of a building or construction and without which these cannot be considered complete, such as, for example, doors, windows, roofs, stairs and elevators;
4. Any item, equipment or machine permanently installed in a building or construction, which cannot be moved without destroying or modifying said building or construction.
Services linked to immovable property referred to in Article 47 of Directive 2006/112/ cover only those services which have a sufficiently direct link with the property in question.

Services be deemed to have a sufficiently direct connection with estate in the following cases:
1. When they derive from real estate and said property is a constituent element of the services and is basic and essential for them.
2. When they are provided in relation to or intended for real estate and are intended for the physical or legal modification of said property.
When machinery or equipment is made available to a client for carrying out works on real estate, such operation shall only be considered a provision of services linked to real estate if the provider assumes responsibility for the execution of the works in question.
The transport of passengers regardless of the recipient and the transport of goods whose recipient is not a businessman or professional (other than those of article 72 of the VAT Law), for the part of the journey carried out in the territory.

Example:

A passenger transport by bus from Seville to Paris is understood to be carried out in the territory of application of Spanish VAT for the part of the journey carried out in said 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 to them, provided that the recipient is a businessperson or professional acting as such and said events actually take place in the aforementioned territory.

These services include all services that grant the right of access in exchange for a price (entry, payment, season ticket or subscription or periodic fee). It does not include the use of facilities such as gyms (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 sanitary facilities, but not mere intermediary services relating to the sale of tickets (Article 33 of Council Implementing Regulation 282/2011).

In the case of cultural, artistic or sporting services, fairs and exhibitions, other than access to them, provided to businesspeople or professionals, the general rule of taxation at destination applies.

Example:

The services provided by an entity dedicated to the organization of events and conferences to other businesspeople or professionals participating in a conference, to whom it charges an entrance fee for their access, are located in the territory of application of the Tax to the extent that the conference actually takes place there.

As we will see in point 7 of this section, also in the case in which the recipient is an individual and does not have the status of a businessman or professional, the service must be located in the territory of application of the Tax provided that the congress takes place in said spatial area (see DGT V0010-16).
Those provided 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 residence or habitual domicile in the territory of application of the Tax, in the following cases:
1. When the following requirements are met:
  - That they are carried out by a businessman or professional acting as such established solely in another Member State because he has there the headquarters of his economic activity, his only permanent establishment in the Community or the place of his permanent domicile or habitual residence; and
  - That the limit provided for in article 73 of the LIVA has been exceeded or the option of taxation at destination provided for in said article has been exercised.
2. That they are carried out by a businessman or professional acting as such other than those mentioned in the first indent of letter a) above.
The following will be considered services provided electronically:

Those consisting of the transmission initially sent and received at the destination by means of processing equipment, including numerical compression and data storage, and entirely transmitted, transported and received by cable, radio, optical system or other electronic means and, among others, the following:
1. The supply and hosting of computer sites.
2. Remote maintenance of programs and computers.
3. Providing and updating programs.
4. The supply of images, text, information and making databases available.
5. The provision of music, films, games, including games of chance or money, and political, cultural, artistic, sporting, scientific or entertainment broadcasts and events.
6. The provision of distance learning (the provision of which does not require, or hardly requires, human intervention).
For these purposes, the fact that the provider of a service and its recipient communicate by email does not, in itself, imply that the service is considered to be a service provided electronically.
Example:

An individual with habitual residence in the territory of application of the tax contracts with a US company access to American TV channels. The American company must charge and pay Spanish VAT.
Those of restoration and catering in the following cases:
1. Those provided on board a ship, aircraft or train during the part of a passenger transport carried out in the Community whose starting point is in the territory of application of the tax.
  
  In the case of round-trip transport, the return journey will be considered as a separate transport.
2. The remaining restaurant and catering services when they are materially provided in the territory of application of the tax.
Shall be deemed:
1. Part of a passenger transport carried out in the Community: the part of a passenger transport which, without stopping in a third country or territory, runs between the places of departure and arrival situated in the Community.
2. Starting point: the first place planned for the embarkation of passengers in the Community, even after the last stop outside the Community.
3. Place of arrival: the last place planned for disembarkation in the Community of passengers also embarking there, even before another stopover in a third country or territory.
4. Restaurant and catering services: the supply of food or drink, or both, for human consumption, provided that they are accompanied by sufficient auxiliary services to allow their immediate consumption, so that said supply is only one of the elements of a set in which services predominate. Therefore, they are not considered restaurant and catering services, but rather the delivery of goods, the supply of food or beverages without the provision of any type of auxiliary service.
Those of mediation on behalf of and for the account of others, whose recipient is not a businessman or professional and provided that the operations for which the mediation is carried out are understood to be carried out in the territory of application.

This special rule, therefore, applies only to services provided to individuals; in the event that the recipient is a businessman or professional, the general rule of taxation at destination applies.
Examples:
- A Belgian real estate agency is mediating in the transfer of a building to a private individual located in Spain. The mediation operation is understood to be carried out in the territory of application of the Spanish VAT .
- A Spanish businessman mediates in the sale of certain textile articles found in China. The items do not leave China. The mediation operation is also not understood to have been carried out in the territory of application of Spanish VAT.
- Mediation services provided by a commercial representative established in Spain to Italian companies without a permanent establishment in Spain, in relation to deliveries from that country to third territories, are not considered to be provided in Spanish territory, since the recipient is a businessman or professional not established in the territory of application of the Tax.
The following services when the recipient is not a businessman or professional and are materially provided in the TAI :
1. Services accessory to transport such as loading and unloading, transshipment, handling and similar services.
2. The work and execution of works carried out on tangible movable property and the expert reports, valuations and opinions relating to said property.
3. Services related to cultural, artistic, sporting, scientific, educational, recreational, gambling or similar events, such as fairs and exhibitions, including the services for organizing them and other services accessory to the above.
This special rule applies only to services provided to individuals. In the event that the recipient is a businessman 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, which we have referred to above in point 3.
Examples:
- A German businessman provides computer repair services to a Spanish individual. The computers are installed in Spain and the service is actually provided at the TAI. Therefore, this service will be taxed in Spain.
- A Spanish businessman sends machinery to Germany for repair, which will then be returned to Spain. The operation will be subject to Spanish VAT by application of the general rule.
- An American singer gives a concert in Madrid; we are faced with a provision of services carried out in the territory of application of the Tax.
Those provided by electronic means, telecommunications, radio and television broadcasting, when the following requirements are met:
1. That the recipient is not a businessman or professional acting as such and is established or has his residence or habitual domicile in another Member State;
2. That they are carried out by a businessman or professional acting as such established solely in the territory of application of the Tax because they have there the headquarters of their economic activity, their only permanent establishment in the Community or the place of their permanent domicile or habitual residence; and
3. That 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 said article exercised.
The above provisions shall apply to services provided during the current year until the quantitative limit indicated above has been exceeded.

Business owners 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 will cover, as a minimum, two calendar years, and it will be necessary to reiterate the option after two years have elapsed so that it is not understood to be revoked.

The following shall be considered telecommunication services:

Those whose purpose is the transmission, emission and reception of signals, texts, images and sounds or information of any nature, by wire, radio, optical means or other electromagnetic means, including the transfer or concession of a right to use means for such transmission, emission or reception and, likewise, the provision of access to computer networks.

The following shall be considered broadcasting services:

Those services consisting of the supply of audio and audiovisual content, such as radio or television programmes provided to the public through communications networks by a communication service provider, acting under its own editorial responsibility, to be listened to or viewed simultaneously following a programming schedule.
Transport leasing services in the following cases:
1. Short-term leases when they are actually placed in the recipient's possession in the aforementioned territory.
2. Long-term leasing when the recipient does not have the status of a businessman or professional acting as such, provided that he is established or has his domicile or habitual residence in the TAI . However, in the case of leasing recreational vessels, they will be deemed to be provided in the TAI when they are actually placed in the possession of the recipient there, provided that the service is actually provided by a businessman or professional from the headquarters of his economic activity or a permanent establishment located in said territory.
Short term shall be understood as:

The continued possession or use of means of transport for an uninterrupted period of not more than thirty days and, in the case of ships, not more than ninety days.

How is the duration of possession or continued use determined:

The contractual conditions will be observed. The contract will constitute a presumption that admits proof to the contrary.

When the leasing of the same means of transport is carried out through consecutive contracts between the same parties, the overall duration will be taken into account, including the contract and its extensions.

Short-term lease contracts that exceed the contractual duration due to force majeure will not have their duration period altered for the purposes of determining their tax regime.
The services listed below, when they are not understood to be carried out in the Community, Canary Islands, Ceuta or Melilla, but their effective use or exploitation is carried out in said territory:
- The following services whose recipient is not a business or professional:
  1. The assignments and concessions of copyrights, patents, licenses, trademarks or trade names and other intellectual or industrial property rights, as well as any other similar rights.
  2. The transfer or granting of goodwill, exclusive purchase or sale rights or the right to exercise a professional activity.
  3. The advertising ones.
  4. Those of advice, auditing, engineering, study offices, law, consultants, accounting or tax experts and others similar, with the exception of those included in number 1 of section One of article 70 of the LIVA.
  5. Data processing and the provision of information, including commercial procedures and experiences.
  6. Those of translation, correction or composition of texts, as well as those provided by interpreters.
  7. Insurance, reinsurance and capitalisation services, as well as financial services, mentioned respectively by article 20, section One, numbers 16 and 18 of the LIVA, including those that are not exempt, with the exception of the rental of safe deposit boxes.
  8. Those for transfer of personnel.
  9. Dubbing of films.
  10. Leases of tangible personal property, except for those involving any means of transport and containers.
  11. The provision of access to natural gas networks located in the territory of the Community or to any network connected to said networks, to the electricity, heating or cooling network and the transport or distribution through said networks, as well as the provision of other services directly related to any of the services included in this letter.
  12. The obligations not to provide, in whole or in part, any of the services stated in this number.
  13. Those leasing means of transport.
- The following services whose recipient is a business person or professional:
  1. Until May 25, 2023, insurance, reinsurance and capitalization services, as well as financial services, mentioned respectively by article 20, section One, numbers 16 and 18, of the LIVA, including those that are not exempt, with the exception of the rental of safe deposit boxes.
  2. Those leasing means of transport.
- Intra-Community goods transport services that begin in the territory of application of the tax and whose recipient is not a businessperson or professional.
  Meaning of:
  1. Intra-Community transport of goods: the transport of goods whose places of departure and arrival are situated in the territories of two different Member States.
  2. Starting point: the place where the transport of the goods actually begins, without taking into account the journeys made to reach the place where the goods are located.
  3. Place of arrival: the place where the transportation of the goods actually ends.
  Example:
  1. A German company purchases goods from a Spanish company located in Zaragoza.
    
    The transfer of this merchandise will be done:
    - 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 Spanish VAT by application of the general rule provided for in article 69. One.1 of the LIVA .
  2. A French individual purchases furniture online from a Spanish company based in Valencia. The company takes care of the transport by road. These transports will be taxed by Spanish VAT when they begin in TAI and the recipient is an individual.