Spanish reverse charge on B2B Services
Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive.
The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located. According to the general B2B rule, any business not established in Spain supplying services to a Spanish registered customer will not charge any VAT and the transaction will be reverse charged by the customer.
There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge is still applicable in Spain:
- Services connected to immoveable property are located where the property is located.
- Passenger transport services will be located where the transport takes places (apportioned if necessary).
- Catering services are located where the catering takes place Short term leasing of means of transport are located where the vehicle put at the disposal of the customer.
- Access to conferences, fairs and exhibitions is located where the event takes place.
There are additional exceptions to the B2B rule such as certain intermediary services, freight services and others. Also, Member States can implement the Use and enjoyment rule also deviates the place of supply from the usual B2B rule.