A German household appliances company with a pre-existing warehouse in Spain sets up a permanent establishment (PE) and asks whether it must retain both its VAT IDs (N and W) or only the W. The DGT confirms that if a non-resident entity operates directly in Spain and through a PE with clearly differentiated activities and separate management, it needs both a VAT ID N and a VAT ID W. However, since the pre-existing warehouse is assigned to the PE and the PE handles all dispatches, the DGT assumes all sales are attributed to the PE (VAT ID W), unless proven otherwise.
Question posed To the extent that the branch constitutes a permanent establishment in Spanish territory for Non-Resident Income Tax (IRNR) and VAT purposes, with management separate from its head office and obtaining income from Spanish sources derived from the development of its own economic activity, separately from the activity developed by the non-resident entity, which also operates on its own in Spain and, therefore, the income from the economic activities developed by the same must be attributed separately to said permanent establishment, confirmation is requested that, by virtue of the provisions of Royal Decree 1065/2007, of 27 July, approving the General Regulation of tax management and inspection proceedings and the development of the rules
Art. 22.2 RGAT requires the use of distinct NIFs when a non-resident entity operates in Spanish territory through permanent establishments with clearly differentiated activities and separate management. The pre-existing warehouse, which did not previously constitute a PE on its own, is assigned to the PE once the latter is created. If the PE intervenes in operations using its own human and technical resources, the operations are attributed to the PE (NIF-W). The issuance of an invoice with a NIF-W presupposes the intervention of the PE unless proven otherwise (art. 53.2 Regulation 282/2011 EU). If the German company also operates without a PE for other sales with separate management, it also requires a NIF-N.