VAT Position on Services rendered in EU

UK Company providing services to a Spanish Company

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Client is UK based. Provides services (Project Management) to a Spanish Company. The services are provided entirely in Spain. UK Company invoices Spanish Company in Euros. Both the UK and Spanish companies are VAT Registered in their own countries but not in each others. Directors of Spanish Company insist that the UK company should not charge VAT on their invoices. Am not certain that is correct. Perhaps because its B2B?  

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By charlb
17th May 2024 11:37

Yes B2B general rule services should be reverse charged - ie UK supplier does not apply UK VAT as outside the scope of UK VAT and Spanish customer declares the Spanish VAT on their VAT return.

If the project management is that of construction etc, then it will be a land related service and subject to VAT where the land is situated. Usually this can still be reverse charged (so the UK supplier does not need to register for VAT in Spain). Either way it is outside the scope of UK VAT.

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Replying to charlb:
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By qhas
17th May 2024 11:43

Thanks v much

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Replying to charlb:
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By qhas
17th May 2024 11:44

Does anything need to be stated on the invoice - like VAT Reverse Charge applies?

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Replying to qhas:
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By Jason Croke
17th May 2024 12:21

No, UK not in the EU so we don't need to quote EU legislation to the customer...but I think adding "invoice subject to reverse charge" is a friendly way to remind the end customer they have to reverse charge.

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By Matrix
17th May 2024 13:13

Well I would check out the direct and indirect tax position of the services provided in Spain first.

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Replying to Matrix:
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By Matrix
18th May 2024 07:16

For some reason others wouldn’t. Never mind.

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