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V2306-17 12 September 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · lugar de realización

Legal advisory services may be taxable in Spain if their effective use occurs within national territory

A Spanish consultancy provides legal advisory services to a US-based firm, which in turn uses them to serve clients in Spain. The DGT examines whether the effective use rule should apply so that the service is taxed in Spain, even though the legal recipient is located abroad.

The question raised

Place of performance of the services provided by the applicant. Application of the effective use rule provided for in Article 70.Two of Law 37/1992.

The DGT's ruling

Advisory services provided to a recipient not established in Spain are not taxed under the general rule, but may be subject to tax if their effective use or exploitation takes place in Spanish territory pursuant to Article 70.Two of Law 37/1992. To this end, the service must be related to transactions subject to tax carried out by the recipient in Spain. If the use is partial, the extent of the use must be determined on a case-by-case basis, which may be based on the proportion of income from transactions carried out in Spain relative to the total.

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