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V2713-18 5 October 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ejecución de obra

Construction services for an embassy in Spain are subject to VAT

A subcontractor has enquired whether their construction works for an embassy in Spain are subject to VAT, given that their client is not established within the Community. The DGT has ruled that the transaction is subject to the tax based on the location of the property.

The question raised

Whether the construction services to be provided by the applicant to the entity not established in the territory of the Community are subject to Value Added Tax.

The DGT's ruling

Whether the execution of work is classified as a supply of goods or as a provision of services, the transaction is understood to be carried out within the territory to which the tax applies. This is because services related to real estate located in Spain are considered to be provided in Spanish territory. Therefore, the transaction is subject to VAT regardless of whether the recipient is not established in the Community.

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