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V2520-20 23 July 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios por vía electrónica

Email sales of PDF books are not subject to VAT if the recipient is in South America

A company has requested clarification on whether the sale of digital books (PDF) via email to businesses or individuals in South America constitutes a supply of goods or a provision of services, and where the transaction takes place. The DGT has determined that it is a provision of services via electronic means and, as the recipient is a non-resident, the transaction is not subject to VAT.

The question raised

Nature of the aforementioned services for Value Added Tax purposes, specifically, whether they must be considered a supply of goods or a provision of services and the determination of the place of supply for the purposes of said Tax.

The DGT's ruling

The supply of e-books without physical media constitutes an electronic service provision. If the recipient is a business person in a South American country, the transaction is not carried out within the territory of application of the Tax. If the recipient is a final consumer in South America, it is also not considered to be carried out in Spain and is not subject to VAT. In the event of assigning copyrights for paper reproduction, the transaction is considered an assignment of rights and is not subject to VAT as it is carried out outside the Community.

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