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V1480-14 4 June 2014 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

No permanent establishment for storage or intermediation activities

A Dutch company asks whether its trading and repurchase of raw materials in Spain, via third-party warehouses or a group subsidiary acting as intermediary, constitutes a permanent establishment. The DGT determines that no permanent establishment exists in the described cases.

The question raised

Whether any of the described combinations may give rise to the existence of a permanent establishment in Spain for the taxpayer, both for the purposes of Value Added Tax and Non-Resident Income Tax.

The DGT's ruling

For Non-Resident Income Tax (IRNR), the storage of goods for the purposes of deposit or delivery does not constitute a permanent establishment under the Convention. The group branch is not a dependent agent if it acts independently and does not have the authority to bind the taxpayer. For VAT purposes, leased storage with own management may constitute a permanent establishment, but the mere service of supervising third-party warehouses does not.

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