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V0059-21 20 January 2021 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

Presence of a payment entity agent in Italy may constitute a permanent establishment

A Spanish payment entity asks whether its activities in Italy through an agent amount to having a permanent establishment. The DGT states that if the agent is a natural or legal person providing payment services on behalf of the entity, a permanent establishment exists under the double taxation treaty with Italy.

The question raised

Existence of a permanent establishment in Italy.

The DGT's ruling

Under the Convention between Spain and Italy, a permanent establishment is a fixed place of business through which an enterprise carries out its activity. If a Spanish payment institution operates in Italy through an agent (a person providing payment services on behalf of the entity), such a situation could be understood as a permanent establishment. The final determination depends on the functional and factual circumstances of each case.

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