Back to index
V4124-15 21 December 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · reglas de localización

VAT should not be charged on translation services provided to non-established businesses, unless the effective use rule applies

A Spanish company has enquired whether VAT should be applied to translation services provided to companies in Japan and Russia. The DGT has ruled that, as a general rule, these services are not subject to VAT if the recipient is a business not established within the territory of application.

The question raised

1. Must the applicant charge Value Added Tax (VAT) for the provision of translation services to two companies with headquarters in Japan and Russia, respectively?

The DGT's ruling

Translation services provided to entrepreneurs or professionals not established in the territory to which the tax applies are not subject to VAT. However, Article 70.Two could apply if the service is effectively used or exploited in Spain to carry out transactions subject to the tax. To this end, there must be a link between the service and the transactions carried out by the recipient in Spanish territory.

Book your free first meeting