Important new regulations about VAT in Spain

11 May Important new regulations about VAT in Spain

The Spanish 2010 Budget Law includes a rise of VAT rates, that applies from June 2010,  from 16 to 18 per cent for the general VAT rate, and 7 to 8 per cent for the reduced VAT rate from the next July 1st. The super-reduced of 4% is maintained.

Apart from this, the “VAT Package” parliamentary procedure  applies from 1st of January 2010,

Features:

– Services between business enterprises (B2B) will in general be taxable at the country where the recipient has its establishment or headquarter.

– When the customer is an individual (B2C), the services will be taxed at the country where the provider has its establishment or headquarters.  There are numerous exceptions when services relate to real estate, transport, restaurant, rental property, electronically supplied services or telecommunications, building work services…

– It strengthens the rule of taxation at the place where the service is really used or enjoyed.

– It considerably expands  the cases where the taxable person is legally inverted for transactions performed by non-established persons – a case where the invertion acquires the rank of general rule-, up to the point that permanent establishments of foreign companies lose all significance for operations performed directly from abroad and without their intervention.

– It increases the formal obligations: the number of intra-Community operator, inclusion of intra-community services in the 349 tax form model request.

– New formal procedure to request return of VAT charged at other E.U countries, to be issued through an electronic request in the host State and subject to new terms.