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V1347-15 29 April 2015 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

Whether a permanent establishment exists depends on whether binding contracts are concluded with shipping companies

A Spanish company asked whether changing from a maritime agency to a subcontracted entity providing administrative services would create a permanent establishment for non-resident shipping companies. The DGT states there is no fixed place of business, and the existence of a dependent agent will depend on whether the company continues to enter into binding contracts with shipping companies.

The question raised

Question posed: Whether the new proposed operation would or would not give rise to the existence of a permanent establishment in Spain for non-resident shipping companies for the purposes of Non-Resident Income Tax and for the purposes of Value Added Tax.

The DGT's ruling

For Non-Resident Income Tax, the existence of a fixed place of business for shipping companies in Spain is not deductible. The existence of a permanent establishment through a dependent agent shall only occur if the taxpayer continues to habitually conclude binding contracts for the shipping companies. Regarding VAT, if the taxpayer acts as an agent with the capacity to negotiate all elements of the contract, thereby binding the shipping companies, they would have a permanent establishment in Spain.

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