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V3224-19 22 November 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios

Technical-medical consultancy is not subject to VAT if the client is foreign and has no registered office in Spain

A Spanish company providing consultancy to a French insurer regarding a project in Egypt seeks clarification on the taxation of its services and those of its suppliers. The DGT determines that the main consultancy services are not subject to VAT, while the treatment of architectural services depends on whether they relate to a specific piece of land.

The question raised

Taxation under Value Added Tax regarding the actions necessary for the development of the project, both those carried out by the consultant in favor of the French insurer and those carried out by subcontracted suppliers in favor of the consultant. Deductibility of the input VAT incurred by the consultant in the development of said project.

The DGT's ruling

Technical-medical consultancy is the principal provision and the others are ancillary, therefore they follow its tax regime; as the client is French and has no registered office in Spain, the consultancy is not subject to VAT. Architectural design services shall not be subject to VAT if they refer to a specific plot of land outside of Spain, but shall be subject to VAT if the design is a general model without a specific location. The consultant may deduct the input VAT as long as it directly and exclusively affects their activity.

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