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V3206-19 19 November 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios

Repairs for non-established entities are outside the scope of VAT and import VAT is deductible

A Spanish company repairs alarm systems for an Israeli entity with no presence in Spain, using imported spare parts. The DGT has ruled that the repairs are not subject to VAT due to the recipient's location and that the company is entitled to deduct the VAT paid on the imported spare parts.

The question raised

Liability for Value Added Tax on the provision of services carried out in favor of the Israeli entity and deductibility of the tax amounts paid by the taxpayer on the occasion of the importation of the spare parts and components acquired for the performance of the repairs.

The DGT's ruling

Repairs are classified as a provision of services because the materials provided by the taxpayer are not significant. As the Israeli entity does not have a headquarters or permanent establishment in Spain, the provision is not subject to VAT. The taxpayer is a taxable person in the importation of spare parts and may deduct the tax amounts provided that the requirements of the Law are met.

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