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V3310-23 27 December 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · localización de servicios

Construction services on property in Portugal are not subject to Spanish VAT

A Spanish company subcontracts construction work on a property located in Portugal. The DGT has ruled that, as these services are directly related to real estate, the place of supply is where the property is situated.

The question raised

1.- Taxation of the services provided by the subcontractor in Value Added Tax.

The DGT's ruling

Construction services performed on real estate are considered directly related to said property. Therefore, they are understood to be provided in the location where the real estate is situated, in this case Portugal. These supplies shall not be subject to VAT in the territory where the tax applies (Spain), and it shall be the responsibility of the Portuguese administration to determine the taxation and the taxable person.

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