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3.3. Indirect taxation

It is in the area of VAT where the most relevant coordinated legislative measures have been adopted.

The indirect taxation implications for e-commerce mainly concern “online e-commerce,” a term that refers to products supplied on the Internet in digitized format (books, software, photographs, movies, music, and so on) and downloaded by a user in real time onto his or her computer, having clicked on to the supplier’s website and paid for the products in question (in contrast to offline supplies where products sold on the Internet are subsequently delivered by using conventional means of transportation). In offline e-commerce, where goods are still physically supplied, the traditional VAT concepts apply.

The main VAT issues arising in relation to e-commerce (especially in the area of online e-commerce) are basically the following:

  • The definition of “taxable event” as a supply of goods or services and the application of the resultant rules for determining the place of supply.
  • The determination of the VAT rates applicable to the different types of e-commerce.
  • The adaptation of the formal obligations and management of VAT to the realities of e-commerce and, particularly, the invoicing obligations.
  • The problems already raised in relation to direct taxation, regarding the determination of the existence of a fixed establishment and of the effective place of business, are also applicable in the area of indirect taxation. Council Implementing Regulation (EU) No 282/2011 has clarified these concepts, defining them as follows:
    • "Place of establishment of a business": The place where the functions of the business’s central administration are carried out, i.e., the place where essential decisions concerning the general management of the business are made, the place where the registered office is located or the place where management meets. The Regulation clarifies that if, having regard to the above criteria, the place of establishment of a business cannot be determined with certainty, the place where essential management decisions are made will take precedence. It also clarifies that a postal address cannot be taken to be the place of establishment of a business.
    • "Fixed establishment": Any establishment, other than the place of establishment of a business, with a degree of permanence and a suitable structure in terms of human and technical resources to enable the services supplied it to be received and used for its own needs.

Each of these issues is briefly examined below:

3.3.1 Definition of “taxable event” as a supply of goods or services for the purpose of determining the place of supply

Directive 2002/38/EC was based on the premise that transactions performed electronically are deemed supplies of services:

  • Services will be deemed to be electronically supplied services where their transmission is sent initially and received at destination by electronic data processing equipment. The fact that the supplier of a service and his customer communicate by e-mail does not of itself mean that the service performed is an electronically supplied service.

    In relation to the concept of “electronically supplied service”, article 7 of Council Implementing Regulation (EU) No 282/2011 further defined it by including a list of services that must be regarded as electronically supplied services and others that are not. In this regard, article 7 established that electronically supplied services are those "delivered over the Internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology".

Implementing Regulation 1042/2013, to which we refer above because it regulates the new rules applicable from January 1, 2015, has revised the list of electronically supplied services as set out in the following table:

Electronically supplied servicesServices not supplied electronically

  1. The supply of digitized products generally, including software and changes to or upgrades of software.

  2. Services providing or supporting a business or personal presence on an electronic network such as a website or a webpage.

  3. Services automatically generated from a computer via the Internet or an electronic network, in response to specific data input by the recipient.

  4. The transfer for consideration of the right to put goods or services up for sale on an Internet site operating as an online market on which potential buyers make their bids by an automated procedure and on which the parties are notified of a sale by e-mail automatically generated from a computer.

  5. Internet Service Packages (ISP) of information in which the telecommunications component forms an ancillary and subordinate part (i.e., packages going beyond mere Internet access and including other elements such as content pages giving access to news, weather or travel reports; playgrounds; website hosting; access to online debates etc.).

  6. The services listed in Annex I.

  1. Radio and television broadcasting services.

  2. Telecommunications services.

  3. Goods, where the order and processing is done electronically.

  4. CD-ROMs, floppy disks and similar tangible media.

  5. Printed matter, such as books, newsletters, newspapers or journals.

  6. CDs and audio cassettes.

  7. Video cassettes and DVDs.

  8. Games on a CD-ROM.

  9. Services of professionals such as lawyers and financial consultants, who advise clients by e-mail.

  10. Teaching services, where the course content is delivered by a teacher over the Internet or an electronic network (namely via a remote link).

  11. Offline physical repair services of computer equipment.

  12. Offline data warehousing services

  13. Advertising services, in particular as in newspapers, on posters and on television.

  14. Telephone helpdesk services.

  15. Teaching services purely involving correspondence courses, such as postal courses.

  16. Conventional auctioneers’ services reliant on direct human intervention, irrespective of how bids are made.

  17. Tickets to cultural, artistic, sporting, scientific, educational, entertainment or similar events, booked online.

  18. Accommodation, car-hire, restaurant services, passenger transport or similar services booked online.


  • Up until January 1, 2015, services were deemed to have been supplied in Spanish VAT territory if:
    • The recipient is a trader or professional and his place of business is in Spain.
    • The supplier is established in Spain and the recipient is a non-trader residing in the EU or having an unidentifiable domicile.
    • The services are supplied from outside the EU and the recipient is a non-trader domiciled in Spain.
    • The recipient is a trader or professional, the services are actually consumed in Spain, and the services have not been deemed supplied pursuant to the above rules in the EU, Canary Islands, Ceuta or Melilla.
    • Directive 2006/112/EC provides that starting on January 1, 2015, the electronically supplied services will be taxed in the Member State where the recipient is established, regardless of where the taxable person supplying them is established. Thus, effective that date, where the recipient, including non-traders, is established in Spain, the services will be deemed supplied in Spanish VAT territory.

In this connection, the place of supply of electronically supplied services can be summarized as follows:

SupplierRecipientPlace of Supply
EU / Non-EU.Trader established in Spain.Spain
EU / Non-EU.Non-EU trader and actual consumption in Spain.Spain
Spain.Non-trader resident in the EU.Spain
EU.Non-trader resident in Spain.Spain
Non-EU.Non-trader resident or domiciled in Spain.Spain (Application of special scheme).


  • As regards determining who is the taxable person, it has been decided to fully apply the current legislation (article 84 of the VAT Law), which establishes that:
    • In general, the supplier of services is the taxable person, regardless of where he is established.
    • In special circumstances, the recipient of the services (rather than the supplier) is the taxable person and is obliged to charge the VAT under the “reverse charge mechanism” (where the supplier is a trader not established for VAT purposes in Spain and the customer receiving the services is a trader or professional established in Spain), notwithstanding the amendments that apply from January 1, 2015 onwards.
    • Furthermore, in cases where the supplier of the services is not established in the EU and the customer is a final consumer (in business-to-consumer, or “B2C,” transactions), the supplier of the services is the taxable person. However, with a view to simplifying their obligations, suppliers only have to register (electronically) for VAT in one Member State, although they will have to charge the VAT relating to each of the jurisdictions where their customers are located and pay it over (also by telematic means) to the tax authorities of the Member State in which they are registered. Subsequently, that Member State will reapportion the VAT collected among the other countries.

      Non-established traders or professionals that apply this special regime in Spain will be entitled to a refund of input VAT in accordance with the refund procedure for non-established traders, without being subject to the reciprocal treatment requirement generally established in the legislation.

      Council Implementing Regulation (EU) No 282/2011 has modified this special regime by introducing certain special VAT management rules in the case of exclusion from the regime, rectification of VAT returns, impossibility of rounding off the VAT payable, etc.

3.3.2 Rules applicable from January 1, 2015

As noted above, Council Directive 2008/8/EC, as fleshed out by Regulation (EU) No 967/2012, introduces specific changes that will apply to electronic services from January 1, 2015 onwards. Specifically, as from that date, services supplied electronically by an EU-established trader to persons who are not traders and are established in a Member State or have their permanent address or usually reside there will be deemed to be supplied in the place where the non-taxable person is established, or where he has his permanent address or usually resides.

Directive 2017/2455, effective as from January 1, 2019, establishes a threshold for the determining the place of provision of these services, the rule being that when the total amount of services of this kind rendered by the services provider does not exceed, in the current year or the preceding year, €10,000, services provided to final consumers shall be considered subject to VAT in the place where the supplier is established.

Spanish legislation stipulates that businesses and professionals may opt voluntarily for taxation at destination even when the €10,000 threshold is not exceeded, this option being valid for a minimum of two calendar years. The option must be exercised through the pertinent census communication, using form 036. In addition, since the approval of Royal Decree 1512/2018 of December 28, 2018, which amends – inter alia - the VAT Regulations, the rule has been that taxable persons who take up this option must demonstrate to the tax administration that the services rendered have been declared in another Member State. Similarly, taxable persons wishing to extend the option exercised must reaffirm it once two calendar years have elapsed, with failure to do so resulting in automatic revocation.

In order to implement the above provisions, Implementing Regulation 1042/2013 introduced the relevant amendments. Accordingly, the Regulation contains provisions:

  • To define and update the list of services that are affected by the rules discussed here and to clarify who the supplier is where several traders are involved (e.g. sale of applications).
  • To define the place of establishment of the customer (legal person not acting as a trader).
  • To clarify – since certain rules already exist in this respect in the Regulation – how to evidence the trader’s status as a recipient.
  • To specify the place of actual consumption of the services through presumptions on the customer’s permanent address or residence and the evidence that can be required, if applicable, to rebut them.
  • To establish transitional provisions.

The Regulation also address the supply of services through a portal or telecommunications network such as a marketplace for applications, in order to clarify who will be deemed the supplier in these cases.

The Regulation contains a number of provisions aimed at defining the place of business, establishment, permanent address or habitual residence according to the type of customer in order to clarify the application of the place-of-supply rules for supplies of services that depend on these circumstances.

These definitions are kept intact, although a specific rule is added for legal persons who do not act as traders whose place of establishment will be where the functions of their central administration are carried out (place of business) or where they have a permanent establishment that is suitable for receiving or using the services.

As regards determining the location of the recipient, the place-of-supply rules that apply from 2015 are those for supplies to parties acting as final consumers, that is, natural or legal persons not acting as traders.

For these purposes, the supplier may regard the recipient as the final consumer as long as the recipient has not communicated his individual VAT identification number to the supplier but, unlike other supplies of services, the supplier may consider the recipient as the final consumer regardless of whether he has information to the contrary.

In the case of legal persons that have several establishments or of natural persons who have a permanent address other than their habitual residence, the Regulation establishes that:

  • For non-trader legal persons the “place of business” prevails on the terms defined in the preceding section.
  • For natural persons, priority will be given to their habitual residence (a concept which is already defined in the Regulation in its current wording) unless there is evidence that the service is used at the person’s permanent address.

However, these rules are not sufficient to determine the place of supply of services where the same recipient can access them from several places or by various means. To try to cover the most frequent cases, the Regulation includes specific rules such as the following:

  • If the services are supplied requiring the physical presence of the customer (e.g. an internet café, a wi-fi hot spot or a telephone booth), the services will be taxed at that location. This rule also applies to services supplied by hospitality establishments where they are supplied in connection with accommodation services.
  • If the service is supplied on board a ship, aircraft or train, at the place of departure of the transport operation.
  • A service supplied through a fixed land line, at the permanent address of the customer where it is installed.
  • If it is supplied through mobile networks, at the country identified by the mobile country code of the SIM card.
  • If the service requires a viewing card or decoder or similar device (without being supplied through a fixed land line), where the decoder or similar device is located, or if that place is not known, at the place to which the viewing card is sent.

In any other case, at the place identified as such by the supplier on the basis of two items of evidence: billing address, IP address, bank details (e.g. place of demand deposit account), the mobile country code stored on the SIM card, location of the land line, other commercially relevant information.

Since January 1, 2019, the rule has been that only one item of evidence are required when the amount of these services rendered by the services provider does not exceed €100,000.

The presumptions on the place of supply of the service described can be rebutted by the supplier if three of the items of evidence listed in the preceding point determine a different place of supply.

The tax authorities may, in turn, rebut any of the presumptions described where there are indications of misuse or abuse by the supplier.

Lastly, note should be taken of what has been called the “mini one-stop shop” system, similar to the one existing for supplies of services by non-EU traders so as to permit the taxable person to file in the Member State of identification a single return which includes transactions addressed to final consumers of different Member States. In Spain, the form for registering with the system is already available.

3.3.3 Determination of the VAT rates applicable to the various types of e-commerce

In keeping with the view held by the Spanish tax authorities, the standard VAT rate of 21% will apply in all cases, since it is a kind of service for which the VAT Law makes no special provision.

It should be noted that the Directorate-General of Taxes, in a ruling dated March 26, 2010, as well as in a ruling dated July 1, 2011, has clarified that as the Directive does not provide for the application of reduced rates for electronic services, the reduced VAT rate can only be charged for e-books when they are included on physical media. This confirms the stance taken by the Spanish authorities not to apply reduced rates to electronic services even where they involve goods which, when supplied physically, are subject to a reduced VAT rate.

In this regard, the Commission launched infringement proceedings against Member States, such as France, that established reduced rates for e-books. In fact, the European Commission set up an Expert Group on Taxation of the Digital Economy. Specifically, the Group was tasked with analyzing and finding solutions for the distortion of competition that arose from the difference in rates between electronic and physical books. It is worth noting in this connection that the Court of Justice of the EU, in its judgment of September 11, 2014 (Case C-219/13), concluded that national legislation that subjects books published in paper form to a reduced VAT rate and books published on other physical supports such as CDs, CD-ROMs or USB keys to the standard VAT rate, is not contrary to EU Law, provided that it respects the principle of fiscal neutrality inherent in the common system of value added tax.

Subsequently, as a result of the changes in the rules on the location of services provided electronically, applicable as from January 1, 2015 (taxation at destination), the risk of distortion of competition was reduced. Consequently, the Commission, in its communication of May 6, 2015 on a Digital Single Market Strategy for Europe, envisaged the need to align the VAT rates applied to electronic publications with the reduced VAT rates in force for publications supplied through a physical medium. This was reiterated in the Commission’s communication of April 7, 2016 regarding an action plan on VAT.

Finally, the Council Directive 2018/1713 of 6 November 2018 amending Directive 2006/112/EC introduces the possibility of Member States aligning VAT rates applied to publications irrespective of whether they are provided on a physical support or electronically. The inclusion of this option in the VAT Directive also derives from the recent judgment of the Court of Justice of the European Union, in case C-390/15, in which the Court concluded that the supply of digital publications on a physical support and of digital publications supplied electronically are equivalent to comparable situations.

3.3.4 Formal obligations and management of taxes

Both the EU and the Spanish tax authorities ascribe to the principle that this form of commerce should not be hindered by the imposition of formal obligations that reduce the speed with which transactions should be performed.

Of particular relevance in this regard are the rules already contained in Council Regulation (EEC) No 1798/2003 on administrative cooperation in the field of value added tax, which, among other matters, provides that individuals and legal entities involved in intra-Community transactions can access the databases kept by the tax authorities of each Member State. This possibility of identifying reliably the status under which the recipient is acting (trader, professional or final consumer) is absolutely decisive for the proper tax treatment of each transaction.

Royal Decree 1619/2012, approving the Regulations on Invoicing Obligations, establishes the legal regime applicable to electronic invoices, which are defined as invoices that have been issued and received in electronic format without the use of a certain technology being required. This Royal Decree supersedes its predecessor, Royal Decree 1496/2003, and stipulates that paper and electronic invoices are treated similarly. In addition, it permits invoices to be kept in an electronic format provided that the conservation method ensures the legibility of the invoices in the original format in which they were received, and the data and mechanisms that guarantee the authenticity of their origin and the integrity of their contents.

The requirements that must be met by electronic invoices are as follows:

  • The recipient must have given his consent.
  • The invoice must reflect the reality of the transactions documented in it and guarantee this certainty throughout its period of validity.
  • The authenticity, integrity and legibility of the invoice must be ensured.

These aspects must be guaranteed by any legally admissible proof and, in particular, through the “usual management controls over the business or professional activity of the taxable person” which must enable the creation of a reliable audit trail establishing the necessary connection between the invoice and the supply of goods or services documented in it.

The authenticity of the origin and integrity of the contents will, in all cases, be guaranteed by:

  • The use of an advanced electronic signature based either on a qualified certificate and created using a secure-signature-creation device, or on a qualified certificate.
  • An EDI that envisages the use of procedures that guarantee the authenticity of the origin and integrity of the data.
  • Other means that have been communicated prior to their use and validated by the authorities.

In relation to the issue of invoices, Royal Decree 1512/2018 of December 28, 2018 which amends – inter alia - the VAT Regulations, stipulates that the legislation applicable to invoices issued by taxable persons who have elected to apply the special single one-stop shop regimes for telecommunications, radio and television broadcasting services and services provided electronically - which had previously been the legislation of the Member State of consumption - shall now be that of the Member State of identification. This avoids the taxable person being subject to different legislative regimes in relation to billing.

Accordingly, the aforementioned Royal Decree 1512/2018 of December 28, 2018 amends the Billing Regulations and clarifies that Spanish billing rules shall be applicable when Spain is the Member State of Identification of the provider of electronic services.

On the other hand, regarding to formal obligations, it must be noted that from 1 July 2017, taxable persons who have to file monthly VAT returns (generally, those whose turnover in the previous year exceeded €6,010,121.04; any taxable person registered in the monthly refund scheme, and any taxable person applying the VAT grouping regime) must also keep their business records on the website of the Spanish tax agency (AEAT) by electronically providing the information requested therein, together with some additional data of the invoices (but not the invoices themselves).

Under this system (generally known as SII), taxable persons will have to submit the information related to invoices issued within 4 calendar days from the date of issuance. If they are invoices issued by the recipient or by a third party, a longer time period of 8 calendar days is allowed. In both cases, subject to a limit ending on the 16th day of the month following that in which VAT on the transaction became chargeable.

Invoices received must also be reported within 4 calendar days, in this case from the date when they are recorded in the accounts. A limit is laid down, also ending on the 16th day of the month following the assessment period in which the transactions are included. A similar rule applies to import transactions.

Saturdays, Sundays and public holidays are excluded from the calculation of the time periods.

The above notwithstanding, in the case of taxable persons who apply the special regime for telecommunications, radio and television broadcasting services and services provided electronically, it is not necessary to record the operations performed under this special regime in VAT registers. Instead, a specific register must be kept, containing a series of special fields:

  1. The Member State of consumption in which the service is provided.
  2. The type of service provided.
  3. The date of provision of the service.
  4. The taxable amount, indicating the currency used.
  5. Any subsequent increase or reduction of the taxable amount.
  6. The tax rate applied.
  7. The amount of tax owed, indicating the currency used.
  8. The date and amount of payments received.
  9. Any advance received prior to the provision of the service.
  10. The information contained in the invoice, if this has been issued.
  11. The name of the customer, where available.
  12. The information used to determine the place where the customer is established, or its domicile or habitual place of residence.