TEAC Nullifies VAT on Legal Services for Non-Resident Post-2023 Reform, Not Located in Spain

• The TEAC annulled the VAT charge for legal services provided to a non-resident, as the service was not effectively located in Spain.
• The legal service agreement was signed in 2019, with fees linked to litigation results and indemnity payment.
• The service concluded on April 28, 2023, with a transactional agreement.
• The invoice issued on July 1, 2023, included VAT, leading to a claim by Ecx on July 28, 2023.
• TEAC ruled that the VAT charge was invalid as the service was completed after the 2023 legal reform.
• The service was not located in Spain, nor was its effective use proven there.
• The VAT was not applicable due to the new legal framework effective from January 1, 2023.
• The recipient, Ecx, is a resident outside the EU, activating the exemption for legal services.
• The TEAC dismissed the rule of effective use as neither the procedure nor the service use occurred in Spain.

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.

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