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V2720-14 10 October 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · servicios prestados por vía electrónica

Online training services determine VAT exemption or standard rate

An educational services company asks how to calculate and deduct a search service from Ireland. The DGT explains that VAT exemption depends on whether the training is an educational service (with human involvement) or an electronic service (automated).

The question raised

Settlement and deduction of the service provided from Ireland.

The DGT's ruling

Online teaching services are exempt educational services if they are provided through communication between teacher and student, even if digital means are used. If the service is automated (downloading files or accessing platforms without essential human intervention), it is considered an electronic service and is taxed at 21%. The deduction of input VAT will depend on whether the company also carries out taxable activities, applying the pro rata rule if necessary.

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