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3Tax 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 on January 16, 2021, such tax being levied on the provision of certain digital services involving users located in Spanish territory. As shall be explained in greater detail in the section on direct taxation, this is a measure adopted by Spain unilaterally, on a transitional basis, through provisional legislation which shall remain in force until a solution adopted internationally can be implemented.

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.

    Finally, other measures came into force on July 1, 2021 (those relating primarily to distance sales of goods) and have been transposed into Spanish legislation by means of Royal Decree-law 7/2021 of April 27, 2021.

    Additionally, Council Directive 2019/1995 of 21 November 2019 introduced amendments which came 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 came 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.
  • 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 content of these EU provisions and their transposition into Spanish law are examined in the section on the indirect taxation of e-commerce.

Work is currently being undertaken by the OECD and the European Union 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, and the establishment of certain minimum taxation thresholds, among other questions.

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 encouraged e-commerce. The consultation period in respect of an initiative to implement a harmonized digital levy was recently initiated.

Finally, it should be noted that on December 30, 2022 the Council of Ministers approved the Draft Law amending the Spanish General Tax Law in order to give effect to the transposition of EU Directive 2021/514 - known as DAC 7 - on cooperation in the field of taxation, the main new feature of which is the obligation to exchange information obtained through the operators of digital platforms with other EU countries.

This transposition improves administrative cooperation in the European Union and extends such cooperation to new areas, with the aim of addressing the challenges posed by the digitalization of the economy and helping tax administrations to collect taxes in a better and more efficient way. In this regard, a new reporting obligation is established with regard to digital platform operators.

In this way, the future regulation will not only transpose the so-called DAC 7, as foreseen in the initial text, but will also implement, in a context of strengthening international cooperation between tax authorities, the Multilateral Agreement between Competent Authorities for the automatic exchange of information on income obtained through digital platforms within the scope of the OECD, which was already signed by Spain.