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V1214-14 6 May 2014 · SG de Fiscalidad Internacional Criterion in force
IVA · establecimiento permanente

Dutch company liable for VAT but not IRNR due to auxiliary activities

A Dutch dairy company asks whether renting a warehouse and hiring logistics services in Spain constitute a permanent establishment for VAT and IRNR. The DGT confirms a permanent establishment for VAT but not for IRNR, as the activities are auxiliary in nature.

The question raised

Consideration of the status of a taxable person obliged to charge the corresponding VAT on domestic deliveries of products to its customers in the TAI and the treatment for Non-Resident Income Tax purposes of the warehouse leased by the taxpayer in Spain for the storage of its products

The DGT's ruling

Regarding VAT, the taxpayer has a permanent establishment in Spain as it possesses a warehouse from which it distributes products, with sufficient structure and permanence despite subcontracting the management. Regarding Non-Resident Income Tax, the warehouse does not constitute a permanent establishment under the Spain-Netherlands Convention, as its purpose is the storage and delivery of goods, which is of a preparatory or auxiliary nature. No permanent establishment is also identified through a dependent agent, as the Spanish company does not appear to have habitual powers to conclude binding contracts on behalf of the Dutch company.

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