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V3621-20 22 December 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción

VAT liability for repair services depends on identifying the actual recipient

A company has enquired whether VAT should be applied when repairing valves for an entity in Spain if the invoice is issued to a company in the USA. The DGT has ruled that VAT liability depends on identifying the actual recipient of the transaction.

The question raised

Liability for Value Added Tax on services provided within the territory of application of the Tax but invoiced to an entity established in a third State.

The DGT's ruling

The recipient is the party holding the position of creditor in the legal relationship where the provider is the debtor. If the recipient is the company established in Spain, VAT must be charged. If the recipient is the entity not established in the Community, the services shall not be subject to VAT.

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