Spain: Implementation of the VAT Package
Wednesday March 17, 2010
The law implementing the VAT Package in Spain was published last week and clarifies the confusion concerning the application of the reverse charge in Spain especially in relation to event organisers.
Before 1st January 2010 a non-Spanish resident organiser of an event or exhibition charged Spanish VAT to non-Spanish companies for event organising services. The original 2010 proposals included a change in the reverse charge rule that meant that the liability to account for Spanish VAT shifted from the non-resident supplier to its non-resident customer irrespective of whether the customer was registered for VAT in Spain. This could have resulted in the customer having to register for VAT in Spain.
This seemed an irrational decision and fortunately the publication of the law last week returned the law to the position prior to 1st January. The change is retrospective to 1st January 2010. So the position now and from 1st January is that the non-resident supplier will continue to be required to be registered for VAT and charge Spanish VAT.