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V3157-23 5 December 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · adquisición intracomunitaria

French company's coating services subject to Spanish VAT

A French company manufacturing anti-corrosive coatings seeks clarification on the classification of its operations and the existence of a permanent establishment in Spain when subcontracting product application. The DGT determines that the purchase of chemicals constitutes an intracommunity acquisition and that the services of application carried out by the Spanish subcontractor do not create a permanent establishment for the French company.

The question raised

Whether the acquisition of the chemical compounds from the consultant by the entity established in the territory of application of the Tax constitutes an intra-Community acquisition of goods for the purposes of Value Added Tax. Whether the application of the coatings by this entity on the client's goods on behalf of the consultant would be classified as a provision of services and, where applicable, the place of performance thereof. Whether the services provided by the consultant to its client would be classified as a provision of services subject to Value Added Tax and, where applicable, the taxable person for the transaction. Whether the consultant would have a permanent establishment in the territory of application of the tax as a consequence of the described operation.

The DGT's ruling

The acquisition of chemical compounds by the Spanish entity constitutes an intra-Community acquisition of goods. The production and application of coatings, due to having a negligible value relative to the parts, qualify as a provision of services. The services provided by the Spanish entity to the French entity are not performed in Spain as the recipient is an entity in France. However, the services provided by the French entity to the Spanish client are considered to be performed in Spain and are subject to VAT, with the client being the taxable person.

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