Spanish VAT Place of Supply Rules: Aligning with EU Legislation and Clarifying Use and Enjoyment Rule

• The Spanish Government is updating VAT legislation to align with EU rules, specifically regarding the place of supply for certain services.
• The general rule is that services to non-established companies are taxed where the recipient is established, not in Spain.
• An exception, the “use and enjoyment” rule, allows Spain to tax services effectively used or exploited within its territory.
• The legislative change clarifies that this rule will not apply to B2B services where both parties have the right to deduct VAT, but will apply to sectors like finance and insurance, and to intangible services supplied to non-EU consumers.
• The new rules will prevent tax evasion in vehicle transport services, will not be retroactive, and will take effect with the new budget law.

Source: ayming.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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