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V2595-20 30 July 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios

Translation services provided by a commercial company are subject to VAT if deemed to be performed in Spain

A commercial company has requested a ruling regarding the VAT treatment of its translation services provided to clients residing in non-EU countries. The DGT has determined that VAT liability depends on the location of the service and that the author's exemption does not apply to commercial companies.

The question raised

Taxation under Value Added Tax on translations carried out by the applicant.

The DGT's ruling

Translation services provided by a commercial company are not exempt under Article 20.One.26 of Law 37/1992, as said exemption is limited to natural persons acting as authors. If the service is deemed to be performed within the territory of application of the tax (by rules of location or effective use), it shall be subject to VAT. Only translations subcontracted by the company and performed by a natural person translator shall be exempt, provided they constitute a personal contribution distinct from the pre-existing work.

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