Spain | Changes to VAT Legislation Under the 2018 Spanish General State Budget

On 4th July 2018, Law 6/2018 (the 2018 General State Budget Law), was published in the Spanish Official Gazette and provides for the following changes to Spanish VAT law.
As of 5th July 2018:

  • The scope of the 10% reduced VAT rate for cultural services is extended to cover cinema tickets; and
  • The EUR 90.15 eligibility threshold, required for use of the tax-free shopping regime, is withdrawn. This special VAT refund scheme applies to sales of goods for personal use, that will be transported out of the EU within three months following the month in which the purchase took place.

As of 1st January 2019:

  • The cost-sharing exemption is amended to exclude services provided to members carrying out insurance, financial, postal services, gaming, immovable property or copyright activities. This provision mirrors the current CJEU view expressed in recent cases such as DNB Banka Case C-326/15, restricting the application of the exemption to members that perform activities in the public interest as listed in the EU VAT Directive; and
  • The place of supply rules for business-to-consumer (B2C) telecommunication, broadcasting or electronically supplies services, will include certain exceptions to the general rule which provides the place of supply is the place where the consumer is established or usually resides. For example, if the total value of cross-border B2C supplies does not exceed EUR 10,000 in a given year, these supplies will be subject to VAT in their country of origin. This EU-wide new rule, provided for in EU Directive 2017/2455, aims to simplify VAT compliance obligations for online businesses.