Rules around Spanish VAT liability on services provided to non-EU customers refined to ensure VAT nuetrality
The Spanish VAT rules have been refined in the 2013 Budget to limit the application of ‘use and enjoyment’ Spanish VAT obligations for non-EU customers. Use and enjoyment override applies to a limited range of intangible services as defined within Article 59 of the EU VAT Directive. Namely: consulting, advertising, legal, audit and accountancy, copyright transfer, and similar professional services. Use and enjoyment gives member states to the option to overrule the general rule for place of supply when the customer is not resident in the EU.
Two changes to bring in line with EU VAT Directive
- The existing Spanish rules gave scope to tax certain such services within Spain even if the services gave right to the right to deduct VAT. This has now been closed. So it will mostly be in the case of exempt banking, insurance and other financial services.
- The scope of use and enjoyment is brought into line with the services provided for in the VAT Directive (see above) when the consumer is non-EU resident.
Read more in our Spanish VAT guide.
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