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V1348-20 11 May 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios

Acquisition of designs from a US entity subject to VAT via passive investor investment

A Spanish weapons manufacturing company seeks advice on VAT treatment for acquiring designs from a US entity. The DGT determines that the transaction constitutes a service supply subject to VAT in Spain, and the Spanish company must apply the passive investor investment rule.

The question raised

Value Added Tax treatment regarding the acquisition of designs from the North American entity.

The DGT's ruling

The assignment of designs is classified as a supply of services subject to VAT when it is understood to be carried out within the territory to which the tax applies. As the provider is an entity not established in Spain and the recipient is a business established in the territory, the Spanish company holds the status of taxable person under the reverse charge mechanism. If there is a relationship between the parties, the taxable amount shall be the normal market value.

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