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Provisions of services

Rules of taxation

The services provided by employers or professionals are taxed as a general rule:

  • When the customer is a trader or professional, where they have the base of their economic activity or they have a permanent establishment or their habitual residence where they receive the service

  • When the customer is a private individual, where the provider has their place of business, a fixed establishment or their habitual residence from which they provide the service.

If a business established in the territory of application of Spanish VAT (TAI) provides a service to a business owner established in another country , the operation is not subject to Spanish VAT, assigning the right to deduct the VAT paid on acquisitions of goods and services that affect this activity in the same way as if carried out in the TAI. If the customer is a businessperson from another Member State, this is an Intra-EU supply of services to be reported on Form 349. Finally, if the customer is a private individual, the transaction is subject to Spanish VAT, which will be paid by the service provider, except for certain services when the customer is established outside the Community (except for the Canary Islands, Ceuta or Melilla), for example, advertising, advisory, auditing, engineering, legal, consultancy or translation services.

If a business established in the territory of application of Spanish VAT receives a service from a business owner established in another country, the operation is subject to Spanish VAT. VAT is settled by the customer, through the mechanism known as reverse charge, declaring, as a general rule on Form 303, the Spanish VAT accrued on the transaction which, in turn, may be deducted when the established requirements are met (Articles 92 et seq. Law 37/1992). If the supplier is a businessperson from another Member State, this is an Intra-EU acquisition of services, which is also to be reported on Form 349.

However, there are specific rules for certain services included in article 70 of Act 37/1992, for example services related to real estate are located where the property is located, access to cultural manifestations in the territory where they take place or the restoration services where they are provided materially.

In order to find out whether the service you are going to perform is subject to Spanish VAT, you can access the "Locator", located in the "VAT Tools".