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V2069-18 12 July 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · cesión de uso

Transfer of software applications to local authorities in other provinces subject to 21% VAT

A Provincial Council has requested clarification on whether the transfer of software applications and associated services to other local authorities is subject to VAT. The Directorate General for Taxes (DGT) has ruled that, as the entities are located in different provinces, the transaction is subject to VAT at the standard rate.

The question raised

Question raised: Taxation of the operations described in the Value Added Tax.

The DGT's ruling

The assignment of use of computer applications is classified as a provision of services. Although Public Administrations may be exempt in certain services between entities dependent on the same Administration, the provision to local entities of other provinces is subject to VAT. As reduced rates do not apply, the general rate of 21% is applicable.

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