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V2304-14 8 September 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · patrocinio

Sponsorship and advertising services to non-resident companies may be exempt from VAT if not used in Spain

A sports club has requested clarification on whether sponsorship, advertising, and image rights services are subject to VAT when the client is a company from a third country. The DGT has determined that these services are not subject to VAT if the recipient is not resident in Spain and does not use those services to carry out operations within Spanish territory.

The question raised

Taxability of the operation under Value Added Tax in Spain.

The DGT's ruling

The assignment of sponsorship, advertising, and image rights is not subject to VAT if the recipient is a non-resident entrepreneur without a registered office or establishment in Spain. However, if the service is effectively used or exploited in Spain to carry out taxable transactions, the effective use rule shall apply. The right of access to sporting events is subject to tax if the event takes place in Spain, whether the recipient is an entrepreneur or an individual.

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