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A chauffeur-driven vehicle hire company requested clarification on whether VAT should be applied when clients are companies based in the European Union. The DGT ruled that this activity constitutes passenger transport and must be taxed in Spain for the portion of the journey carried out within national territory.
Companies providing chauffeur services must ensure that the portion of any journey occurring within Spain is correctly taxed at the reduced VAT rate of 10%, even when the client is a business entity from another EU member state.
The tax team reviews your specific situation.
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