{"id":3043,"date":"2020-11-23T17:12:08","date_gmt":"2020-11-23T17:12:08","guid":{"rendered":"http:\/\/www.gmtaxconsultancy.com\/?p=3043"},"modified":"2020-11-23T17:12:08","modified_gmt":"2020-11-23T17:12:08","slug":"vat-on-digital-services","status":"publish","type":"post","link":"https:\/\/gmtaxconsultancy.com\/en\/tax\/vat-on-digital-services\/","title":{"rendered":"VAT on Digital Services"},"content":{"rendered":"<p>Spain is a very good place to start a digital business, as VAT is one of the lowest in the European Union (onwards, \u201cthe EU\u201d).<br \/>\nIf you are doing business online, you must charge Spanish VAT on sales to or from Spain, depending on the different situations.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-white ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">\u00cdndice contenidos<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/gmtaxconsultancy.com\/en\/tax\/vat-on-digital-services\/#What_are_digital_services\" >What are digital services?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/gmtaxconsultancy.com\/en\/tax\/vat-on-digital-services\/#What_is_Form_368\" >What is Form 368?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/gmtaxconsultancy.com\/en\/tax\/vat-on-digital-services\/#To_which_businesses_does_the_law_apply\" >To which businesses does the law apply?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/gmtaxconsultancy.com\/en\/tax\/vat-on-digital-services\/#Non-exclusive_online_product_or_service\" >Non-exclusive online product or service<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/gmtaxconsultancy.com\/en\/tax\/vat-on-digital-services\/#Exclusive_online_product_or_service\" >Exclusive online product or service<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/gmtaxconsultancy.com\/en\/tax\/vat-on-digital-services\/#Where_and_how_are_they_taxed\" >Where and how are they taxed?<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_are_digital_services\"><\/span><strong>What are digital services?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Los servicios digitales son servicios prestados exclusivamente a trav\u00e9s de Internet y que requieren poca o ninguna intervenci\u00f3n humana.<\/p>\n<p><span style=\"font-weight: 400;\">Digital services are services provided exclusively via the Internet and require little or no human intervention.<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> Access to and download of files.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Software update.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Hosting services.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Access to the web application.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Remote maintenance of software and hardware.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Distribution of images, texts and information and their storage in databases.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Distribution of music, films, games (including money wagers and online games).<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Distribution of scientific, artistic, sports, cultural and political content.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> E-learning.<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">For example, distance training of a tutor via Zoom or Skype will not be considered as digital service.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Form_368\"><\/span><strong>What is Form 368?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Form 368 is required for companies selling digital or <\/span><a href=\"https:\/\/ec.europa.eu\/taxation_customs\/business\/vat\/telecommunications-broadcasting-electronic-services\/content\/mini-one-stop-shop_en\" target=\"_blank\" rel=\"nofollow noopener noreferrer\"><span style=\"font-weight: 400;\">MOSS (Mini One Stop Shop)<\/span><\/a><span style=\"font-weight: 400;\"> services for online sales to EU countries within.\u00a0For companies registered in Spain for MOSS through form 034, the company must file a tax return only in Spain and not in all countries where consumers are resident. MOSS is only applicable below a certain threshold.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The form must be filed electronically, in the electronic headquarters of the State Tax Administration Agency (<\/span><i><span style=\"font-weight: 400;\">Agencia Estatal de Administraci\u00f3n Tributaria<\/span><\/i><span style=\"font-weight: 400;\">).<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-3026\" src=\"https:\/\/gmtaxconsultancy.com\/wp-content\/uploads\/modelo-368.png\" alt=\"modelo 368\" width=\"1084\" height=\"812\" srcset=\"https:\/\/gmtaxconsultancy.com\/wp-content\/uploads\/modelo-368.png 1084w, https:\/\/gmtaxconsultancy.com\/wp-content\/uploads\/modelo-368-300x225.png 300w, https:\/\/gmtaxconsultancy.com\/wp-content\/uploads\/modelo-368-768x575.png 768w, https:\/\/gmtaxconsultancy.com\/wp-content\/uploads\/modelo-368-1024x767.png 1024w, https:\/\/gmtaxconsultancy.com\/wp-content\/uploads\/modelo-368-710x532.png 710w, https:\/\/gmtaxconsultancy.com\/wp-content\/uploads\/modelo-368-1040x779.png 1040w\" sizes=\"(max-width: 1084px) 100vw, 1084px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">This declaration must be submitted each quarter, during the first twenty calendar days of the month immediately following the corresponding quarterly period to which the declaration refers and regardless of whether or not telecommunications, radio or television broadcasting and electronic services have been provided during that period.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"To_which_businesses_does_the_law_apply\"><\/span><b>To which businesses does the law apply?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>European law distinguishes between sales or services made on the Internet and services made available exclusively through a website.<\/p>\n<div class=\"boxes\">\n<div class=\"box50\">\n<h3 style=\"color: white;\"><span class=\"ez-toc-section\" id=\"Non-exclusive_online_product_or_service\"><\/span>Non-exclusive online product or service<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If the services or products offered can be requested by other means, such as a phone call or by going to a physical shop, they are not considered strictly digital services. In this case, the internet is only one of several means by which you can make first contact.<\/p>\n<\/div>\n<div class=\"box50\">\n<h3 style=\"color: white;\"><span class=\"ez-toc-section\" id=\"Exclusive_online_product_or_service\"><\/span>Exclusive online product or service<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If the company operates exclusively through the Internet, it is a service or product acquired with minimal or no human intervention, such as downloads of e-books, multimedia or access to web applications or platforms.<\/p>\n<\/div>\n<\/div>\n<h2><span class=\"ez-toc-section\" id=\"Where_and_how_are_they_taxed\"><\/span><strong>Where and how are they taxed?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The general rule is that a service is taxed according to the laws of the country in which the service is provided.\u00a0<\/span><\/p>\n<p><b>Nonetheless, specific rules apply to digital services<\/b><span style=\"font-weight: 400;\">. Different criteria will apply whether the end-consumer is a company\/professional or a private individual, on one hand, and whether the service is provided to a consumer established in Spain, in another EU country or in a country outside the EU, on the other hand. <\/span><\/p>\n<p><strong>1. If the end-consumer is established in Spain, <\/strong>the electronic service provided will be taxed with Spanish VAT, regardless of whether the end-consumer is a company\/professional or a private individual.<\/p>\n<p><strong>2. If the end-consumer is established in another EU country:<\/strong><\/p>\n<ul>\n<li><strong>The end consumer is a private individual:<\/strong> This is the case for which the Form 368 should be considered.From the 1st January 2019 the limit on which the company will have to apply the VAT rate of the country where the consumer resides will be 10,000 euros. (before VAT).\n<p>Under this threshold, Spanish VAT will be included in the invoice.<\/p>\n<p>Above this threshold, the Spanish company must register as a VAT collector in the EU country and pay VAT there. In this case, the invoicing program must apply the target VAT rate to invoices issued in that country.<\/p>\n<p>An alternative to this would be registering to the consumer\u2019s country system or to the Special Regime for electronic services in which case the \u20ac10,000.00 does not apply. In this case, the invoice should include the VAT of the country where the consumer is established.<\/li>\n<\/ul>\n<p>The end-consumer is a company\/professional: if both the buyer and the seller have a VAT number, the invoice will not include VAT.<\/p>\n<ul>\n<li><strong>El consumidor final es una empresa\/profesional<\/strong>: si tanto el comprador como el vendedor tienen NIF-IVA, la factura no incluir\u00e1 el IVA.<\/li>\n<\/ul>\n<p><strong>3. If the end consumer is established in a non-EU country:<\/strong><\/p>\n<ul>\n<li><strong>The end-consumer is a private individual:<\/strong> In this area the legislation is not clear. According to the Spanish legislation, the invoice should include Spanish VAT, but according to the European Directive, it should include the VAT of the country where the consumer is established.<\/li>\n<li>The end consumer is a company\/professional: <strong>this is tax exempted, therefore the invoice should not include VAT. <\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>When opening an online business in Spain, it is always useful to get the opinion of a Spanish lawyer. Digital tax issues can be potentially sensitive as transactions are often regulated by European Union law and international treaties.<\/p>\n<p>You can contact a <a href=\"https:\/\/gmtaxconsultancy.com\/en\/tax-advice-barcelona\/\">tax advisor<\/a> at GMTax Consultancy by email or telephone.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Spain is a very good place to start a digital business, as VAT is one of the lowest in the European Union (onwards, \u201cthe EU\u201d). If you are doing business online, you must charge Spanish VAT on sales to or from Spain, depending on the different situations. What are digital services? Los servicios digitales son [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":3040,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[52],"tags":[],"class_list":["post-3043","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax"],"_links":{"self":[{"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/posts\/3043","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/comments?post=3043"}],"version-history":[{"count":0,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/posts\/3043\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/media\/3040"}],"wp:attachment":[{"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/media?parent=3043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/categories?post=3043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/tags?post=3043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}