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V1200-19 29 May 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · servicios prestados por vía electrónica

The effective use rule may apply to electronic services provided to entities outside the EU

A company has requested clarification on whether the VAT effective use rule applies to online sales platform support services provided to China and Germany. The DGT has determined that, although these services are not located in Spain under the general rules, the effective use rule could apply if the recipient uses the service in the course of transactions subject to VAT within Spanish territory.

The question raised

The taxpayer wishes to know whether the rule of effective use under Article 70. Two of the Value Added Tax Act is applicable to the services provided.

The DGT's ruling

Services provided electronically may be taxed in Spain under Article 70. Two if their effective use or exploitation takes place in Spanish territory. To this end, it is necessary that the recipient uses the service in the performance of transactions subject to VAT in Spain. In the event of partial use, the extent of use must be determined on a case-by-case basis, which may be based on the proportion of income from transactions subject to the tax relative to the total.

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