- The TEAC analyzed the concept of permanent establishment, requiring sufficient permanence and an adequate structure of human and technical resources, but not necessarily owned.
- Belonging to the same business group does not imply availability of technical and human resources in the territory.
- XZ GH, established in an EU member state other than Spain, requested VAT refunds for 2021 and 2022, subcontracting work to XZ SPAIN S.L.
- The AEAT denied the requests, arguing XZ GH operated through a permanent establishment in Spain, based on service duration and subcontracted resources.
- The AEAT used the group relationship as a central reason for denial.
- XZ GH systematically subcontracted services to XZ SPAIN S.L. for corporate policy reasons, without direct involvement in material work.
- The TEAC upheld XZ GH’s claim, annulling the VAT refund denials, as no permanent establishment in Spain was proven.
- Legal or economic ties between entities do not imply a permanent establishment.
- The TEAC based its decision on a restrictive interpretation of permanent establishment, requiring sufficient permanence, available resources, and effective economic activity.
- The TEAC reiterated EU court doctrine that group membership or exclusive contracts do not suffice without proof of available resources and independent operation.
Source: audiconsultores-etlglobal.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
