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V1864-20 9 June 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · régimen especial de agencias de viajes

Inversion of the recipient in services from non-established providers

A travel agency asks about VAT treatment when purchasing hotel bookings from providers outside the tax territory. The DGT confirms that, as the agency is the recipient of services from non-established entities, the rule of inversion of the recipient applies.

The question raised

Application of the reverse charge mechanism in the purchase of room reservations when the supplier is established outside the territory to which the Tax applies, whether in the Canary Islands, another Member State of the Union, or a third State.

The DGT's ruling

Services provided by suppliers not established in the territory to which the tax applies, which are subject to the special regime for travel agencies in the Canary Islands or the EU, shall not be subject to the tax as they are taxed at the location of the agency's headquarters. If the supplier is not subject to the special regime, the services shall be taxed under the general regime. In these cases, as the agency is the recipient established in Spain, the reverse charge mechanism applies, making the agency itself the taxable person for the tax. The tax incurred on goods or services that directly benefit the traveler may not be deducted.

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