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V3114-14 18 November 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Service provider not established in Spain must issue invoice without VAT applying passive investment

A Portuguese engineering company asks whether its aerial photography services to a Spanish entity constitute intracommunity operations and whether it must issue a VAT-free invoice. The DGT responds that the service is located in Spain and that the Spanish recipient is the passive party through passive investment.

The question raised

The Portuguese entity questions whether the described service can be considered an intra-Community transaction and, if so, whether the recipient is obliged to apply the reverse charge mechanism and, consequently, to receive an invoice issued by the Portuguese entity in which VAT is not charged.

The DGT's ruling

The service is located within the territory to which the tax applies, either by the general rule of location (business recipient in Spain) or by the special rule for services related to real estate. Since the provider is not established in Spain, the taxable person for the transaction is the recipient of the service. Therefore, the provider must not charge VAT, and the Spanish recipient must perform the tax settlement.

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