VAT on training services from Mexico: liability in Spain

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the location of international service provisions. In this case, the situation of a Spanish entity receiving training services from collaborators located in Mexico is analyzed.

What the DGT has ruled

The query concerned whether the services provided by said collaborators were subject to Value Added Tax (IVA) and what invoicing requirements had to be met. The DGT has determined that the provision of services is considered to take place within the territory where the tax applies when the recipient is a businessperson or professional with their economic activity based in Spain.

Since the querying entity is based in Spanish territory, the services provided by its collaborators in Mexico are considered to be performed in Spain. Consequently, the provision is subject to IVA, and the collaborators are obliged to charge said tax on their invoices to the Spanish entity, in accordance with current regulations.

What this means for you

If your company hires services from professionals or collaborators residing abroad, such as in Mexico, for training or consultancy activities, you must verify the location of your economic activity's headquarters. If your headquarters are in Spain, the service is considered to be performed here.

This implies that the invoice you receive from your international collaborators must include IVA. It is not an exempt operation or one outside the scope of the tax simply because the provider resides in another country; the key lies in the location of the service recipient.

What you should do

It is necessary to ensure that the accounting documentation correctly reflects the nature of the operation. For the company to be able to deduct the tax, it is essential to receive invoices that comply with legal requirements and break down the corresponding IVA.

It is recommended to verify the status of international providers and ensure that invoicing complies with the provisions of Law 37/1992 and Law 58/2003, avoiding errors in the deductibility of the tax. Each international contracting structure must be analyzed to determine its exact tax treatment.