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V0225-21 10 February 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · gestión de cobro

Collection management for foreign clients may be subject to VAT if effectively used in Spain

A consultant provides collection management services to a client in Malaysia. The DGT examines whether these administrative, non-financial services are subject to VAT under location rules or the effective use and exploitation clause.

The question raised

Question raised 1. Liability of said operation for Value Added Tax.

The DGT's ruling

Debt collection management services are not exempt as financial operations, but are instead classified as administrative or professional services. Although general rules may locate the provision of services outside of Spain, the rule of effective use and exploitation under Article 70.Two of Law 37/1992 shall apply if the services are effectively used or exploited within Spanish territory. This analysis of effective use must be conducted on a case-by-case basis and is a matter of fact that must be proven by the interested party.

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