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V2256-17 8 September 2017 · SG de Fiscalidad Internacional Criterion in force
IRNR · beneficios empresariales

Web development services provided from Spain without physical presence in Dominican Republic are only taxable in Spain

A Spanish company inquired whether income from developing a website for a Dominican company was subject to tax in that country. The DGT ruled that, as there is no physical presence in the Dominican Republic, the income can only be taxed in Spain.

The question raised

Whether the service provided by the applicant is subject to taxation in the Dominican Republic.

The DGT's ruling

According to the Convention between Spain and the Dominican Republic, services requiring a physical presence in the source country may be taxed there with a limit of 10%. However, the Protocol requires physical presence to apply this criterion. Since the web development service was provided from Spain without the displacement of personnel, the income may only be subject to taxation in Spain.

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