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V2660-20 17 August 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · servicios prestados por vía electrónica

Service classification depends on whether it is proactive mediation or merely the provision of IT tools

A company requested clarification on whether its music repertoire management services for digital platforms constitute services provided by electronic means or mediation services. The DGT ruled that they shall be classified as mediation services if there is a proactive intermediation function, rather than just the automated provision of software.

The question raised

Consideration of the services supplied by the applicant as services supplied by electronic means and the taxation thereof in Value Added Tax, specifically, place of supply, taxable person, tax point, taxable amount, tax rate, and the deductibility of the amounts borne by the clients receiving the applicant's services.

The DGT's ruling

Services are considered to be supplied by electronic means only if they are limited to the provision of a computer tool in an essentially automated manner. If the applicant performs functions such as the collection of royalties, content management, or the negotiation of terms, these shall be classified as mediation services acting on behalf of others. In both cases, if the recipient is a taxable person or a professional established in Spain, the transaction shall be subject to VAT.

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