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V3056-16 1 July 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · establecimiento permanente

Mobile telephony service contracted by a mutual insurance company is located within the scope of VAT

A workers' compensation mutual insurance company has enquired whether it must bear VAT on the consumption of mobile handsets at its centres in the Canary Islands. The DGT ruled that, as the service cannot be linked to a specific permanent establishment and was contracted by the head office, the service is located within the territorial scope of the tax.

The question raised

It is questioned whether the applicant must also bear the Tax for the consumption carried out through the terminals assigned to healthcare centers established in the Canary Islands.

The DGT's ruling

Mutual insurance companies have the status of entrepreneurs for VAT purposes. When telecommunications services are provided to an entrepreneur, the place of supply is determined by the location of their business activity or by the permanent establishment that receives and uses the service. If it is not possible to link the mobile telephony service to a specific healthcare center, as it was contracted by the headquarters that pays for the provision, the service is located in the territory of application of the Tax.

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