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V2138-17 18 August 2017 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

Presence of a permanent establishment depends on continuity and available resources

A tax resident in Andorra asks whether their consultancy activities for Spanish hotels constitute a permanent establishment for income tax and VAT. The DGT states that information is insufficient to determine this, although for VAT there appears to be no sufficient structure or permanence.

The question raised

Existence of a permanent establishment in Spain for the taxpayer for the purposes of non-resident income tax and value added tax. Obtaining a tax identification number in Spain. Address to be communicated to the State Tax Administration Agency for the purposes of tax registration.

The DGT's ruling

For Personal Income Tax (IRPF), the assigned office could constitute a permanent establishment if there is a fixed place of business with a certain degree of permanence. For VAT, a permanent establishment is not considered to exist if there is no adequate structure of human and technical resources with sufficient permanence. The taxpayer's Tax Identification Number (NIF) shall be their National ID (DNI), and their tax residence shall depend on the regulations of each specific tax or on the permanent establishment, if one exists.

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