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V1705-22 15 July 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · lugar de realización

Advisory services to a non-established company may be exempt from VAT if not effectively used or exploited in Spain

A Spanish company provides advisory and marketing services to a company based in Hong Kong. The DGT examines whether these services are subject to VAT and whether the Hong Kong company can recover the tax incurred.

The question raised

Whether the services provided by the consulting company to the non-established company are subject to Value Added Tax.

The DGT's ruling

Advisory services shall not be subject to VAT if the recipient is not established in the territory to which the tax applies. Notwithstanding, the rule of effective use and exploitation under Article 70.Two shall apply if the services are effectively used or exploited in Spain. Regarding the refund, the Hong Kong company may not use the procedure under Article 119 bis when making intra-Community supplies and must instead rely on the general refund rules.

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