Changes in Spanish use and enjoyment rules

Update June 2023

Further to the changes introduced via the State’s Budget Law for 2023, the Spanish government approved new modifications to the Spanish use and enjoyment rules.

The scope of the Spanish use and enjoyment rules is reduced even more by excluding the B2B financial and insurance services. This updated rule is applicable from 26 May 2023.

Changes for the Spanish use and enjoyment rules

Spain changed the scope of use and enjoyment rules as of 2023, following the approval of the Spanish State’s Budget Law for 2023.

Spain introduced use and enjoyment rules deviating the place of supply from a non-EU country to Spain, according to where the service is effectively consumed.

To sum it up, the changes presented in the Spanish State’s Budget for 2023 concerning the use and enjoyment rules are the following:

• In B2B supplies, Use and enjoyment will only apply to services that are exempt from VAT. In most cases, this referred to supplies of finance and insurance services, however, these are now excluded according to the latest update. Leasing of means of transport remains in the list of services specifically included.
• Extending the use and enjoyment rule to the supplies of intangible services B2C to final customers not established in the EU, when the actual consumption takes place in Spain.

The referred supplies B2C of intangible services include the following list of services: transfer of copyrights and similar services, supply of staff, financial and banking services, data processing, consultancy services, advertising services, hiring of moveable property and access to electricity and gas.

These changes aim to ensure the application of VAT neutrality in Spanish place of supply rules.

Comparing with the previous use and enjoyment rules in Spain

The previous use and enjoyment rules in Spain applied exclusively to the B2B supplies of services included in this list:

• Transfer of copyrights and similar services, supply of staff, financial and banking services, data processing, consultancy services, advertising services, hiring of moveable property, and access to electricity and gas.
• Intermediary services.
• Leasing of means of transport.
• Electronically supplied services, telecommunication, broadcast, and television services.

This means that, when the customer is established outside the EU, but the actual use of the service from the above list is connected to Spain, the place of supply shifts from the non-EU country to Spain. 

The recent Law changes imply an important reduction of the scope of B2B Spanish use and enjoyment rules. The rule will no longer apply, for example, to the intermediaries’ services, telecommunication services electronically supplied, as well as to radio and television services. 

Also, the use and enjoyment rules are extended to the B2C transactions involving intangible services – which correspond to the first point of the above list, and the leasing of new means of transport.