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V1062-20 24 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · inversión del sujeto pasivo

Social media service billing depends on professional's tax residency

A Spanish company temporarily resident in Finland provides social media management services to a Spanish company and asks how to invoice. The DGT states that VAT treatment and IRPF withholding obligations depend on whether the consultant has their tax domicile in Spain or abroad.

The question raised

How should such services be invoiced to the Spanish client.

The DGT's ruling

If the professional has tax residence in Spain, VAT must be charged and their income is subject to personal income tax (IRPF) withholding. If they have tax residence in Finland, the reverse charge mechanism for VAT applies, and the Spanish client must self-assess the tax. In the latter case, invoicing obligations are governed by Finnish regulations, unless the client issues the invoice.

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