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V1479-19 19 June 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · uso efectivo

Advertising and marketing services are not deemed performed in Spain if the recipient carries out no taxable transactions in the territory

A Swiss company inquired whether the advertising and marketing services it receives are subject to VAT in Spain under the effective use rule. The Directorate General for Taxes (DGT) ruled that, as the company is not established in Spain and does not carry out taxable transactions within the territory, this rule does not apply.

The question raised

Location of the described services. Application of the rule of 70.two

The DGT's ruling

To apply the effective use rule of Article 70.Two of Law 37/1992 in advertising services, it is necessary that the recipient uses the service in the performance of transactions subject to VAT in the territory of application. If the recipient does not perform subject transactions in said territory, the location of the service remains outside of Spain according to the general rules of Article 69.One.1º.

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