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V3105-21 14 December 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción al impuesto

Advertising services received by Ceuta entities not subject to VAT if recipient is based there

An online gaming company asks whether the new Ceuta structure allows reduced IAJ rates and whether advertising services received by Ceuta subsidiaries are subject to VAT. The DGT states that if entities are established in Ceuta, advertising services are not subject to VAT and outlines the requirements for real establishment in Ceuta.

The question raised

Question posed: Whether the advertising services to be received by the applicant from entities established in the territory of application of the tax would be subject to Value Added Tax. Whether the creation of this new structure in Ceuta will determine that the entity meets the requirements to apply the reduced tax rates provided for in section 2 of article 48.7 of Law 13/2011, of 27 May, regulating gambling.

The DGT's ruling

Marketing and advertising services provided to entities established in Ceuta would not be subject to VAT as the rule of effective use does not apply. To apply reduced rates in the IAJ, the operator must have tax residence in Ceuta and be genuinely established there. Genuine establishment is assessed through three requirements: staff exceeding 50% in Ceuta, payroll exceeding 50% in Ceuta, and intra-group services being less than 50% of total costs. The use of a single lease agreement with subsequent subleasing does not prevent establishment, but the cost of the sublease counts as an intra-group service.

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