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V2583-23 26 September 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · establecimiento permanente

Services provided by a subsidiary to its foreign parent may be exempt from VAT

A Luxembourg-based company asks whether services of commissioning and quality control carried out by its Spanish subsidiary for itself are subject to VAT. The DGT determines that since the parent company is the recipient and is established in another EU member state, the service is not subject to VAT.

The question raised

Place of supply for Value Added Tax purposes of the services provided by the subsidiary, established in the territory of application of the Tax, to the Luxembourg entity.

The DGT's ruling

The quality control and vehicle tuning services provided by the subsidiary to the Luxembourg entity are not subject to VAT. This is because the recipient of the services is an entity established in another Member State acting as a taxable person or a professional. Therefore, the provision is not subject to the tax according to the rules of location of services.

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