Skip to content
Back to index
V1746-17 6 July 2017 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

Absence of permanent establishment in Spain for Dutch company

A Dutch company seeks advice on whether its reorganisation in Spain, via a manufacturing subsidiary (maquila) and a new commercial subsidiary (SESP2), constitutes a permanent establishment. The DGT concludes that no permanent establishment exists under the given conditions.

The question raised

Whether, following the reorganization, the Dutch consulting company has a permanent establishment in Spain for the purposes of the Convention between Spain and the Netherlands.

The DGT's ruling

There is no permanent establishment through manufacturing if the Spanish company acts independently with its own resources and assumes risks. There would also be none through promotional activity if the Spanish company acts as an independent agent. However, if the essential activity of the non-resident is carried out in Spain instrumentally through its subsidiaries, it would not be unreasonable to consider the existence of a permanent establishment based on economic and geographic coherence.

Book your free first meeting