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V2325-24 8 November 2024 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios

Legal services provided to a non-established business client are not subject to VAT

A commercial entity has enquired whether its legal services provided to a business client located outside the Community are subject to VAT. The DGT has determined that, as the recipient is not established within the territorial scope of the tax, the supply is not deemed to have taken place in Spain.

The question raised

Whether said provision of legal services shall be subject to Value Added Tax.

The DGT's ruling

The provision of services is considered to be carried out within the territory subject to the Tax when the recipient is an entrepreneur or professional who maintains the registered office of their economic activity or a permanent establishment in said territory. Given that the client is an entrepreneur not established in the territory subject to the Tax nor does they have a permanent establishment therein, the provision is not understood to be carried out in Spain and is not subject to VAT.

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