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V1530-14 11 June 2014 · SG de Fiscalidad Internacional Criterion in force
IRNR · prestación de servicios

Services contracted with non-resident entities for transfers from Spain are taxable in Spain

A Spanish remittance company asks whether payments for services provided by a bank in the Dominican Republic are subject to Spanish taxation. The DGT responds that since the services are used in the company's economic activity in Spain, they are considered income earned within Spanish territory.

The question raised

Whether the payment for services provided to the Spanish taxpayer by the bank and the rest of the subcontracted companies in each country is subject to taxation in Spain.

The DGT's ruling

The provision of services contracted by a Spanish entity is considered to be obtained in Spain when they are used within Spanish territory for economic activities carried out in the country. In this case, the service of the non-resident bank serves the main activity of the taxpayer in Spain, which is the execution of transfers from Spain to foreign countries. Therefore, the services provided by the financial institution in the Dominican Republic are subject to Non-Resident Income Tax.

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