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V0584-22 21 March 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · servicios electrónicos

Electronic services may be subject to VAT depending on recipient's location

A professional seeking to register as a self-employed contractor for providing electronic services asks about VAT regime and the obligation to make instalment payments of IRPF. The DGT clarifies that VAT applicability depends on the recipient's location and the nature of the service, and that instalment payments of IRPF are required.

The question raised

1.- VAT: To determine under which regime the Value Added Tax would be taxed, specifically whether it could be done under the simplified special regime, as well as the taxation in cases of invoicing within the territory to which the Tax applies or in Gibraltar.

The DGT's ruling

Regarding VAT, the provision of services shall be subject to tax if the recipient, whether an entrepreneur or a final consumer, is located within the territory to which the tax applies, particularly in the case of electronic services. For services in Gibraltar, taxation shall depend on whether there is effective use or exploitation within Spanish territory. Regarding Personal Income Tax (IRPF), income is considered returns from economic activities, and the taxpayer shall be obliged to make quarterly installment payments, unless the requirements for exemption via withholdings are met.

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