Spanish reverse charge for non-established companies

According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on supplies made by non-established businesses. Spain has introduced an extended version of this reverse charge.

Where a non-established supplier sells goods to a taxable person, domestic reverse charge applies. It is not relevant if the supplier is registered or not. Regarding the customer, it is not relevant if it is established or VAT registered. Even when the customer is not VAT registered, reverse charge applies, hence requiring this customer to register and account for VAT.

For services, however, domestic reverse charge would only apply where a) the supplier is not established, b) the service is located in Spain according to the exceptions to the B2B rule (e.g. admission to events, land related, etc.) and the c) the customer is established in Spain for VAT purposes.

• Supplier requirements

  Not established in Spain

  (irrelevant if the supplier is registered or not for VAT)

• Customer requirements

  Taxable person

  (irrelevant if the customer is established or VAT registered)

• Scope

  All supplies of goods

  Supplies of services located in Spain (exceptions to the B2B rule) when the customer is established