6 important changes in the Law regarding the Spanish Value Added Tax

Reforms of the laws 26, 27 and 28/2014    VAT:

 VAT in Spain. The fiscal advisors of our law firm in Spain, Arcos & Lamers Asociados, your Spanish accountant and lawyer in Marbella under one roof, have the pleasure to inform you about relevant changes in the most complex tax in Spain. The so known, Impuesto Sobre el Valor Añadido, IVA. The below mentioned information is relevant in the event that you  wish to set up a company or you already are running a business In Spain.

1. Regarding the exemptions of article 20, there will be a new version for the cases of non-profit entities. The exemption of notary fees in financial transactions will be eliminated. So these entities will become subject thereto. And in the case of sales of plots where construction is not allowed, these sales will not only be exempt for the promoter but also for any businessman or professional that is not a promoter.

2. With regards to the execution of service rendering (article 69 and 70), new rules of localization of the services will be applied from 1^st January 2015 onwards.

– In the case the person rendering a service is a businessman or a professional, then the service is understood to be rendered in the domicile of the recipient.

– Should there be a final customer, then taxation shall take place wherever the recipient is situated, regardless of where the person rendering the service has his/her domicile.

In other words, the service is understood to be rendered in the place of the recipient.

3. Regarding the modifications of the tax base determined in article 80, for small and medium businesses, the modification of the tax base can be carried out in case of non-payments if certain requirements are complied with, within a period of 6 months or one year as from accruement date.

4. A new case of investment for the taxpayer in case of being a businessman or professional for those who deliver very specific products (silver, palladium, palatine, mobile telephones, computers, laptops, tablets, etc).

5. Regarding the tax rates of article 91, the tax rates for medical equipment, health products or other instruments for medical use or use in hospitals will increase from 10 to 21%. The special regime for refunds will be even more flexible as determined in article 119.bis.

6. With regards to the special regime for groups of entities as set out in article 163, the version is changed in this sense that in order to be a group, the companies must be firmly linked on financial, economic and organizational level, provided that the registered offices for economic activities or permanent establishments of each company is situated in the territory where the tax is applicable.

Do not hesitate to contact our law firm and team of economists in Marbella for any enquiry on your fiscal and legal issues. It will be a pleasure for us to attend you in our offices in Marbella.