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V0433-16 3 February 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeto pasivo

VAT applicability to services provided by a partner to their company depends on independence or subordination

Consultants, who are lawyers and partners in a legal services firm, inquired whether their services to the company are subject to VAT. The DGT ruled that VAT applicability depends on a case-by-case analysis of whether the relationship is one of independence or subordination.

The question raised

Taxability of the services provided by the consultants to the company of which they are partners.

The DGT's ruling

To determine whether a partner is a taxable person for VAT purposes, it must be analyzed whether a relationship of subordination or independence exists through three indicators: working conditions, remuneration, and responsibility. If the partner is subject to the organizational criteria of the company, does not receive remuneration linked to the results of their activity, and the company is liable to third parties, the relationship is employment-based and not subject to the tax. Conversely, if the professional organizes their own means, receives remuneration based on results, and assumes responsibility towards third parties, the activity is subject to VAT.

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