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3. Tax implications of e-commerce in Spain

3.1. Initiatives taken in relation to taxation, problems and general principles

In relation to e-commerce, Law 4/2020 of October 15, 2020 on the Tax on Certain Digital Services (“TCDS”) came into force in Spain on January 16, 2021, such tax being levied on the provision of certain digital services involving users located in Spanish territory. As is explained in the section on direct taxation, this is a measure adopted by Spain unilaterally on a transitional basis, and it is therefore a provisional arrangement in place until the new legislation implementing a solution adopted at international level comes into force.

On the other hand, in relation to VAT, Spain has assumed commitments at European Union (“EU”) level.

Below is a list of the basic pieces of VAT legislation emanating from the EU:

  • Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax. Council Directive 2008/8/EC of 12 February 2008 has amended Directive 2006/112/EC as regards the place of supply of services, introducing, in particular, rules applicable to telecommunications, broadcasting and electronically supplied services, with effect from January 1, 2015. On the other hand, Directive 2017/2455 of 5 December 2017 also introduced certain amendments in relation to on-line trading in goods and services. Part of these amendments came into force on January 1, 2019 (those affecting trade in services) and the pertinent changes have therefore already been made to internal legislation. Other measures, however, will not come into force until January 1, 2021 (those relating primarily to distance sales of goods) and are pending transposition into Spanish legislation.

    Other measures, however, will not come into force until July 1, 2021 (those relating primarily to distance sales of goods) and are pending transposition into Spanish legislation.

    Additionally, Council Directive 2019/1995 of 21 November 2019, has introduced amendments that will come into force on July 1, 2021, related to distance sales of goods and certain domestic supplies of goods.

  • Council Implementing Regulation (EU) No 282/2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax. This Regulation has been amended by Council Implementing Regulation (EU) No 1042/2013 of 7 October 2013 as regards the place of supply of services. Similarly, Implementing Regulation 282/2011 was amended by means of Implementing Regulation 2017/2459 of 5 December 2017 for the purpose of introducing certain simplification rules in respect of on-line trading in services for small and medium-sized companies. These changes came into force on January 1, 2019.

    Additionally, Council Implementing Regulation 2019/2026 of 21 November 2019 has also introduced amendments to Implementing Regulation 282/2011 that will come into force on July 1, 2021. Those amendments are related to supplies of goods or services facilitated by electronic interfaces and the special schemes for taxable persons supplying services to non-taxable persons, making distance sales of goods and certain domestic supplies of goods.

  • Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax, which recast Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of value added tax and repealing Regulation (EEC) No 218/92 on administrative cooperation in the field of indirect taxation (VAT), in respect of additional measures regarding electronic commerce. On the other hand, this Regulation has been amended by Regulation (EU) 2017/2454, in order to introduce certain changes concerning the transmission of information and transfer of money between Member States, as a result of the new provisions introduced in relation to on-line trading, with effect as from January 1, 2021.

    Additionally, Council Implementing Regulation 2019/2026 of 21 November 2019 has also introduced amendments to Implementing Regulation 282/2011 that will come into force on January 1, 2021. Those amendments are related to supplies of goods or services facilitated by electronic interfaces and the special schemes for taxable persons supplying services to non-taxable persons, making distance sales of goods and certain domestic supplies of goods.

  • Council Regulation (EU) No 967/2012 of 9 October 2012 amending Council Implementing Regulation (EU) No 282/2011, as regards the special schemes for non-established taxable persons supplying telecommunications services, broadcasting services or electronic services to non-taxable persons. Among other matters, this Regulation regulates the existence, starting January 1, 2015, of a single point of electronic contact for suppliers of EU electronic, telecommunications, and broadcasting services which will enable enterprises to declare and pay over the VAT in the Member State where they are established rather than doing so in the customer’s country.

The provisions of these pieces of legislation and their transposition into Spanish law are examined in the section on the indirect taxation of e-commerce.

Nowadays, member countries of the Organization for Economic Co-operation and Development (OECD) and the G20 are working on the developing and implementing of international standards in tax matters. This work has its origin in the 15 measures of the Action Plan against of the Base Erosion and the Profit Shifting (BEPS Action Plan) published in 2013. Action 1 of this project (Addressing the tax challenges of the Digital Economy, OECD, 2015) addresses the current fiscal challenges of the digital economy. In 2019, the OECD, through the Inclusive Framework on BEPS which met on May 28 and May 29, has launched a new document with a work program to achieve a consensus solution in 2020 on the tax challenges of the digital economy. This document contains a Pillar One, focused on reforming the principles of international taxation, and a Pillar II, targeted at the outstanding challenges of BEPS and giving rise to the proposal of two possible measures: an income inclusion rule and what is referred to as a tax on base eroding payments, both aimed at allowing some countries to tax certain types of income where the country with primary taxing rights has not exercised its fiscal sovereignty in a way considered to be sufficient. As is indicated in the preamble to the TCDS Law, the OECD has recently reinitiated the work being undertaken to adapt the international tax system to the digitalization of the economy through the re-allocation of taxing rights to market countries or territories when participating in the economic activity, without the need for a physical presence, creating a new nexus for that purpose.

The EU has also been concerned about the growing digital economy of our day. In this sense, it has long promoted the European Strategy eEurope002 (now eEurope2020) which encourages e-commerce. The consultation period in respect of an initiative to implement a harmonized digital levy was recently initiated.