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V2221-19 19 August 2019 · SG de Fiscalidad Internacional Criterion in force
IRNR · establecimiento permanente

No permanent establishment if no fixed business location or recurrent activity in Spain

A German company provides vehicle maintenance and transport services at mobile events in Spain. The DGT determines no permanent establishment exists due to the absence of a fixed business location and concludes that the services are exempt from Spanish VAT.

The question raised

Determination of the existence of a permanent establishment. Tax classification with respect to Non-Resident Income Tax.

The DGT's ruling

There is no permanent establishment because there is no fixed place of business nor a recurring activity that meets the requirements of permanence. Nevertheless, the company must apply personal income tax (IRPF) withholdings to employees hired in Spain. Furthermore, it is obliged to register in the Census of Employers, Professionals, and Withholders due to the payment of income subject to withholding.

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