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V0949-21 19 April 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · localización de servicios

Legal services to non-EU clients may be subject to VAT if effective use occurs in Spain

A lawyer sought clarification on whether legal defence services provided to a UK entity were subject to VAT. The DGT explains that while the general rule suggests no liability, the criterion of effective use and exploitation in Spain may apply.

The question raised

Question posed: Subjectivity of the described services to Value Added Tax.

The DGT's ruling

Legal services, being included in Article 69.Two, may be taxed in Spain pursuant to Article 70.Two if their effective use or exploitation takes place in Spanish territory. This applies whether the recipient is the initial or the final user, regardless of whether they carry out transactions subject to tax. The determination of whether such effective use exists is a question of fact that must be analyzed on a case-by-case basis.

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