Central Administrative Court – New judgment considers a Spanish branch and headquarters as separate VAT taxpayers

The new judgment¹ is a required reading for those companies who carry out VAT-exempt transactions through a Spanish branch. Industries concerned are mainly insurance companies and financial institutions.

In the case at hand, the insurance group was composed of two Spanish subsidiaries, one Irish entity and one Swiss entity. The Swiss entity supplied services to the Spanish entities, for which a management fee was paid. The Spanish entities accounted for VAT through the reverse charge mechanism until 2010.

Source: bakermckenzie.com

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