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V0491-21 4 March 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · dropshipping

Dropshipping activity does not generate VAT-liable operations in Spain

A dropshipping company asks whether it can deduct foreign advertising and marketing service VAT. The DGT states that the activity does not generate VAT-liable operations in Spain and that deductions for foreign charges are not possible.

The question raised

Question raised: The right to deduct VAT amounts incurred on advertising and marketing services acquired for the development of their dropshipping activity is questioned.

The DGT's ruling

The dropshipping activity described does not give rise to VAT-taxable transactions within the territory to which the tax applies. The taxable person cannot deduct in Spain VAT amounts or other taxes on turnover incurred in other countries. Deductibility is conditional upon the acquisitions corresponding to taxable transactions within the territory to which the tax applies.

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