The Spanish government has made a welcome modification to the use and enjoyment rule in VAT. The rule had been causing complexity and competitiveness issues for Spanish companies. The recent changes exclude financial and insurance services from the rule, further reducing its scope. Now, the rule only applies to certain services provided to final consumers (B2C) and the leasing of means of transport. This change is well-received by Spanish taxable persons as it simplifies VAT charging and recovery. However, challenges remain in determining the meaning of ‘use and enjoy’ and addressing previous years’ application of the rule. Overall, the modifications are seen as positive progress by Fernando Matesanz of Spanish VAT Services .
Source: internationaltaxreview.com
