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V1956-15 19 June 2015 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

Long-term technical services may constitute a permanent establishment in Spain

An American company provides technical advisory services for a shipbuilding project in Spain by dispatching its engineers. The DGT examines whether this activity establishes a permanent establishment for IRNR and VAT purposes.

The question raised

Whether the consultant has a permanent establishment in Spain as a consequence of the described services and the corresponding taxation in Spain (whether or not such an establishment exists)

The DGT's ruling

For Non-Resident Income Tax, the existence of a permanent establishment is determined according to the Spain-USA Convention, requiring a fixed place of business and the performance of activities through its personnel. For VAT, an adequate structure in terms of human and technical resources is required, with a sufficient degree of permanence to allow the provision of services. In both cases, the classification will depend on whether these requirements of structure and permanence are met.

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