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V2651-20 13 August 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · localización de servicios

VAT on legal services for non-resident companies depends on effective use or exploitation in Spain

A Hong Kong company has enquired whether the services of a Spanish lawyer to claim commissions in Spain are subject to VAT. The DGT explains that, although the general rule places the provision of services outside Spain, VAT may apply if the service is effectively used or exploited within Spanish territory.

The question raised

Whether the services provided by the lawyer to the consulting company are subject to Value Added Tax.

The DGT's ruling

Legal services, being services under section Two of Article 69, must be analyzed under the rule of effective use or exploitation of Article 70.Two. For VAT to apply, the service must be used by the non-resident entity in the performance of transactions subject to the tax in Spain. This use must be direct or indirect and must be related to the transactions carried out within the national territory.

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