On the one hand, the Spanish Central Tax Court analyzed whether the services supplied by a Spanish branch to non-EU entities are subject to Spanish VAT. Specifically, the Spanish branch was contracted for the management and distribution of non-Spanish funds by non-EU entities. Therefore, when an investor (Spanish client) would like to invest in those funds commercialized by the non-EU entities, the Spanish branch would act as a point of contact providing supporting services to the non-EU entities in order to manage the investment.
The tax court concluded that the “use and enjoyment rule” applies and that the services provided by the Spanish branch are subject to Spanish VAT, because the services provided by the Spanish branch are ultimately effectively used in Spain, as those support services are limited to Spanish clients.
Source Baker & McKenzie
