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V2890-19 21 October 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · establecimiento permanente

Requirements for a permanent establishment to be the effective recipient of services and to be able to deduct VAT

A Hong Kong-based tour operator has inquired whether its permanent establishment in Spain is entitled to deduct and recover VAT on contracted services. The Directorate-General for Taxes (DGT) has ruled that if the establishment does not carry out operations and is not the effective recipient of the services, it cannot exercise this right.

The question raised

Question raised: Whether a permanent establishment may exercise the right to deduct input tax and to obtain a refund of the amount corresponding to said tax.

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