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V1600-22 1 July 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios

Translation services to EU clients may be exempt from VAT depending on location and use

A translator seeks clarification regarding invoicing obligations, VIES registration, and summary statements when providing services to clients within and outside the EU. The Directorate-General for Taxes (DGT) clarifies that VAT liability depends on whether the recipient is a taxable person or a private individual, and whether the service is effectively used in Spain.

The question raised

In relation to response V1460-21, which establishes the possibility that the services provided within the tax territory by the applicant might be exempt from Value Added Tax, the applicant seeks to know the invoicing obligation and the requirement to register in the VAT Information Exchange System in the event that the services provided by the applicant are destined for clients established in a Member State other than Spain.

The DGT's ruling

Translation services are not subject to VAT if the recipient is a taxable person in another Member State without an establishment in Spain, or if they are a non-taxable person outside the EU. However, the criterion of effective use and exploitation shall apply if the service is used within Spanish territory. If the service is exempt as a personal contribution by a natural person translator, there is no obligation to invoice non-taxable persons, but there is an obligation to invoice taxable persons. Registration in the VIES is necessary if the services are deemed to be performed in another Member State.

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