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V2374-23 5 September 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción

VAT applicability to legal services depends on client status and effective use of the service

A query was raised regarding whether legal services provided by a company to a client in Equatorial Guinea are subject to VAT. The DGT explains that applicability depends on whether the client is a business or a private individual, and analyses the potential application of the effective use and enjoyment rule in Spain.

The question raised

Whether the services provided are subject to Value Added Tax.

The DGT's ruling

If the client is an entrepreneur or professional not established in Spain, the services are not subject to tax unless the client has a registered office or establishment in Spanish territory. If the client is an individual, the supply is not subject to tax pursuant to Article 69.Two.d), but it could be taxable if the service is effectively used or exploited in Spain under Article 70.Two. Determining the independence of the professional from the company requires an analysis of their working conditions, remuneration, and liability.

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