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VAT telecommunications and electronic services

Registration and VAT returns for transactions covered by this system which are taxable in other Member States

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Definitions and localisation rules

Find out where telecommunications, broadcasting, television and electronic services are taxed for individuals

Rules for the localization of telecommunications, radio or television broadcasting and electronic services to individuals:

Telecommunication, radio broadcasting or TV and electronic services are taxed in the Member State of establishment of the customer, whether the customer is a business or professional or a person who is not such (final consumer), and whether the service provider is a business established in the Community or outside it.

  1. Telecommunications, radio and television broadcasting and electronic services rendered by an EU business:

    In the event that the provider is established in a single Member State and provides this type of service to final consumers in other Member States without exceeding 10,000 euros, it will be taxed in its Member State of establishment, instead of the one where the client resides:

    AddresseeService providerPlace of taxation
    Business in another Member State Entrepreneur established in one or more EM EM where the client is established or resides. The recipient declares and pays the VAT (“reversal of the taxable person”)
    End consumer in another Member State Business established in only one member state (MS) The amount of these services rendered to end consumers in other member states is under 10,000 euros (before VAT) EM where the provider is established. The provider may choose to pay taxes in the MS where the client is established or resides.
    The amount of these services rendered to end consumers in other member states is over 10,000 (before VAT) EM where the client is established or resides. The service provider can register in a single EM to declare and pay VAT through the Mini Single Window regime
    Business established in more than one MS EM where the client is established or resides. The service provider can register in a single EM to declare and pay VAT through the Mini Single Window regime
    Business or end consumer outside of the Community Business established in one or more member states (MS) Not subject. Possible exception: In certain cases, when the service is effectively used in the TAI

    Example: A business established only in Spain (Madrid) renders electronic services to national clients. In June 2019, it provided services to end consumers established in Germany for an amount of 5,000 euros.

    These services are located in the Spanish tax territory as the services rendered to EU customers other than domestic customers do not exceed €10,000. However, the company may opt to pay tax in Germany, registering and submitting its VAT tax returns corresponding to these services in Spain through the One-Stop Shop service (MOSS)

  2. Telecommunications, radio and television broadcasting and electronic services rendered by a non-EU business:

    AddresseePlace of taxation
    Business in the Community EM where the client is established or resides. The recipient declares and pays the VAT (“reversal of the taxable person”)
    End consumer in the Community EM where the client is established or resides. The service provider can register in a single MS through the Mini One-Stop Shop regime
    Business or end consumer outside of the Community Not subject. Possible exception: in certain cases, when the service is effectively used in the territory of tax application

     

Telecommunication services are, among other things:

  • Land line and mobile telephony services for the transmission of voice, data and video.

  • Telephony services provided online.

  • Call management services.

  • Audiotext, fax, telegraph and telex services.

  • Internet access, including the World Wide Web.

For more information see article 6.bis of the Implementing Regulation ( EU ) No. 282/2011, included by article 1 of the Implementing Regulation (EU) No. 1042/2013.

radio and television broadcasting services shall include radio or TV programmes transmitted or retransmitted via radio or television broadcasting networks, following a programming schedule and under the editorial responsibility of the service provider, as well as those distributed simultaneously via the Internet.

It does not cover, among other things:

  • Supplying information, with a previous request, on specific programmes.

  • The transfer of rights of broadcast or television retransmission.

  • Financial leasing of technical equipment used in the reception of a broadcast.

  • The radio or television programmes distributed online or through similar electronic networks (IP streaming), unless that distribution is simultaneous to the transmission or retransmission through traditional radio or TV networks.

For more information see article 6.ter of the Implementing Regulation ( EU ) No. 282/2011, included by article 1 of the Implementing Regulation (EU) No. 1042/2013.

Services provided electronically include services provided online or through an electronic network that, due to their nature, are basically automated and require minimum human implication, and which are not viable without the use of information technology, including:

  • Web site and of web page hosting.

  • Remote maintenance of programs and computers.

  • Access to or download of programs and their updates.

  • The supply of images, text, information and making databases available.

  • Access to or download of music, films, games, including games of chance or involving money, magazines and online newspapers, digitalised contents from books and other electronic publications.

  • Automated remote teaching that depends on the Internet to work and that does not need, or barely needs, human implication.

  • Packets of internet services related to information and in which the telecommunications component is secondary and subordinate (service packets that go further than simple access to the Internet and include other elements like contents pages with links to news, weather or tourist information, games, website hosting, access to online debates, etc.).

The fact that the service provider and the recipient communicate by e-mail does not imply, in and of itself, that the service is a service provided electronically; therefore electronic services do not cover, among others:

  • Goods which are ordered or processed electronically.

  • Professional services, such as lawyers and financial consultants, who advise their clients by e-mail.

  • Teaching services in which the contents of the course are taught by a teacher online or through an electronic network.

  • Telephone help services.

For more information see Annex II of Directive 2006/112/ EC , article 7 and Annex I of Regulation ( EU ) No. 282/2011 modified by Implementing Regulation (EU) No. 1042/2013.

The service provider will be obliged to deposit the VAT except when the recipient is a business established in a different Member State from the State where the provider has its activity headquarters or a permanent establishment from which it carries out the service, in which case it will be the customer who will deposit the tax through the mechanism of taxpayer reversal.

The service provider may consider that a customer established in the Community is not a business as long as said customer has not communicated their NIF-VAT to the provider, regardless of if the provider has information that indicates the opposite.

The "residence" of an individual is the address registered in the population census or in a similar register or the address indicated by that person to the tax authorities, unless there is proof that this address is not real.

The term "habitual residence" of a natural person means the place where they habitually live due to personal and occupational ties.

When the natural person resides in one country and has their habitual residence in another country, priority shall be given to their habitual residence, unless it can be demonstrated that the service is really used at their actual home.

At the place where the functions undertaken by ones own Central Tax Administration Office are performed.

In the place of any other establishment that is characterised by a sufficient degree of permanence and an adequate structure in terms of human and technical resources that allow it to receive and to use the services that are provided for the necessities characteristic of said establishment.

Where the corporate person is resident in more than one country, priority shall be given to the location of the Central Office, unless it can be shown that the service is used in one of their own facilities.

It will be presumed that the customer is established, has his or her residence or usual place of residence:

  • For services provided in locations that require the physical presence of the user (e.g. telephone booth, wireless WI-FI access zone, cyber café, restaurant or hotel entrance): in said location.

    If such a location is situated on board a ship, an aeroplane or a train that transports passengers in the Community, the location country will be the country of departure for the passenger transport.

  • Services provided through a land line telephone: in the place of installation of the line.

  • Services provided through mobile networks: in the country identified by the national mobile telephone code of the SIM card.

  • Services that require the use of a decoder or similar device or a TV card and do not require the use of a landline: in the place where the decoder or similar device is located or, if that place is not known, in the place where the TV card is sent.

  • In circumstances other than the previous, in the place determined by the provider based on two non-contradictory elements of proof out of the following:

    • The customer's invoice address.

    • The IP address of the device used by the customer or any geolocation system.

    • The bank information (e.g. location of bank account used for payment or the customer's invoice address that the bank has).

    • The mobile country code (MCC) of the international identity of the mobile service subscriber stored in the SIM card.

    • The location of the land line phone.

    • Other relevant information from a business point of view.

The service provider may refute the above assumptions on the basis of three non-contradictory pieces of evidence showing that the customer is established, has his permanent address or usually resides elsewhere.

Elements of proof include:

  • The customer's invoice address.

  • The IP address of the device used by the customer or any geolocation system.

  • The bank information (e.g. location of bank account used for payment or the customer's invoice address that the bank has).

  • The mobile country code (MCC) of the international identity of the mobile service subscriber stored in the SIM card.

  • The location of the land line phone.

  • Other relevant information from a business point of view.

The tax authorities will be able to refute any of the presumptions indicated when there is evidence of bad use or abuse by the service provider.

The European Commission services have prepared explanatory notes as a guidance tool that can be used to clarify the practical application of the rules on the place of supply of telecommunications, television and broadcasting and electronic services.

Explanatory notes (Spanish version).