Skip to content
Back to index
V2261-17 8 September 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción al impuesto

VAT applicability to partners' services depends on independence or employment relationship

A consulting firm has requested clarification on whether professional services provided by its partners are subject to VAT. The DGT has ruled that VAT applicability depends on whether a relationship of subordination exists or if the partner acts independently by organising their own resources and assuming economic risks.

The question raised

Liability for Value Added Tax on services performed by partners.

The DGT's ruling

To determine liability for VAT, it must be analyzed on a case-by-case basis whether the partner acts independently or under an employment relationship. The relationship is employment-based (not subject to VAT) if the professional is subject to the organizational criteria of the company, does not have remuneration linked to results, and the company is liable to third parties. Conversely, if the partner organizes their own means, assumes the economic risk of their activity, and is liable to third parties, the provision shall be subject to the tax.

Book your free first meeting