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V1079-23 27 April 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · servicios prestados por vía electrónica

Public Administration must apply reverse charge mechanism for electronically supplied translation services

The Ministry of Defence has requested a ruling regarding the taxation of an automated translation service contracted from a German company via the internet. The Directorate General for Taxes (DGT) has determined that the service is electronically supplied and that the Public Administration must apply the reverse charge mechanism.

The question raised

Question posed: Taxation of the service subject to inquiry for Value Added Tax purposes.

The DGT's ruling

Automated translation services provided through a website or application are considered services provided electronically. As they are provided by an entity not established in Spain to a recipient with a VAT number, the place of supply is situated in the territory where the tax applies. Therefore, the inquiring entity must declare the transaction by applying the reverse charge rule.

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