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V1534-17 15 June 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · cesión de derechos

The assignment of intellectual property rights may be subject to VAT if their effective use is in Spain

A Spanish company inquires whether the assignment of intellectual property rights to a client not established in the EU is subject to VAT. The DGT explains that, although the general rule indicates there is no liability, VAT will apply if the service is effectively used to carry out transactions subject to the tax in Spanish territory.

The question raised

Question raised: Liability of operations for Value Added Tax.

The DGT's ruling

The assignment of intellectual property rights to a recipient not established in the EU is not subject to VAT if they do not have a registered office or establishment in Spain. However, pursuant to Article 70.Two of the VAT Law, the tax shall be applicable if the service is effectively used or exploited in Spanish territory to carry out transactions subject to the tax. To apply this clause, it must be verified that the recipient uses the service in the performance of taxable activities in Spain.

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