Spain makes changes to its use and enjoyment rules in 2023

Spain makes changes to its use and enjoyment rules in 2023

Until the end of 2022, most services supplied by Spanish businesses to customers located outside the European Union were subject to Spanish VAT. This was due to the extended application of Spain’s use and enjoyment rules. Typically, services such as advertising, consulting or supplies of trademarks and patents supplied to non-EU businesses would be taxable in Spain.

Since 1 January 2023, the Spanish government made significant changes to its VAT Act including reducing the scope of the use and enjoyment rule. Under the amendments to the legislation, B2B professional services now fall outside of the scope of Spanish VAT when the business customer is established in a third territory or third country. For non-EU sellers using online marketplaces established in Spain, this means that the marketplace services provided from 1 January 2023 are no longer subject to Spanish VAT.