Skip to content
Back to index
V0073-24 15 February 2024 · SG de Impuestos sobre el Consumo Criterion in force
IVA · establecimiento permanente

Advisory services to a foreign company without a permanent establishment in Spain are not subject to VAT

A Bulgarian company with workers in Spain sought clarification on whether services provided by a Spanish employment consultancy were subject to VAT. The DGT ruled that, as the company does not have a permanent establishment in Spain, the provision of services does not take place within Spanish territory.

The question raised

Whether the services provided by the labor advisory firm to the consulting company are subject to Value Added Tax.

The DGT's ruling

For a provision of services to be subject to VAT, the recipient must have its place of business, a permanent establishment, or its domicile located within the territory. Since the consulting company does not have a structure of human and technical resources with permanence, nor agents with the authority to contract on its behalf, it does not have a permanent establishment in Spain. Therefore, the advisory services are not considered to be performed within the territory of application of the tax.

Book your free first meeting