By means of Legislative Decree No. 2/2021 on tax depreciation, Law No. 19/1992 on Value Added Tax was amended. For the applicable amendments, the regulation defined the terms “Intra-Community distance sales of goods” and “Distance sales of goods imported from third countries or territories”.
1. Definition of terms
The regulations state that, for the purposes of the Regional Law, the following definitions shall be considered:
- “Intra-Community distance sales of goods”: goods delivery being dispatched or transported by the seller, directly or indirectly, or on his behalf, from a Member State other than that of the arrival of the dispatch or transport to the customer, where the following conditions are met:
- The recipients of such supplies are persons whose intra-Community acquisitions of goods are not subject to tax according to the provisions of Article 14, or the equivalent provision applicable in the Member State of the arrival of the dispatch or transport, or any other person who is not exercising as trader or professional.
- Delivered goods must be different than those indicated below:
- New means of transport, as defined in article 13. 2.
- Installation or assembly goods referred to in Article 68. 2.2.º of the Law regulating the common system of Value Added Tax.
- “Distance sales of goods imported from third countries or territories”: delivered goods being dispatched or transported by the seller, directly or indirectly, or on his behalf, from a third country or territory to a customer located in a Member State, when the following conditions are met:
- The recipients of such delivery are persons whose intra-Community acquisitions of goods are not subject to tax pursuant to the provisions of Article 14, or the equivalent provision applicable in the Member State of the arrival of the dispatch or transport, or any other person who is not exercising as a trader or professional.
- Delivered goods must be different than those indicated below:
- New means of transport, as defined in article 13. 2.
- Installation or assembly goods referred to in Article 68. 2.2.º of the Law regulating the common system of Value Added Tax”.
2. Application of the Special Regime
It will be called “External Union Regime” and apply to services provided by entrepreneurs or professionals not established in the Community to recipients who do not have the status of entrepreneurs or professionals acting as such.
To be clearer, those entrepreneurs or professionals who are not established in the Community and provide services to persons established in the Community or who have their domicile or habitual residence there and who do not have the status of entrepreneur or professional, but act as such, are included in the regime.
Likewise, the special regime shall apply to all services rendering that must be deemed to have been carried out in the Community, under the provisions of the Law governing the common system of value-added tax, or their equivalents in the legislation of other Member States.
Likewise, the special regime will be applied to all supplies of services that must be understood to be carried out in the Community, in accordance with the provisions of the Law regulating the common system of Value Added Tax, or its equivalents in the legislations of other Member States.
3. Definitions applicable to the regime
For the above regime, the following should be considered:
- “Entrepreneur or professional not established in the Community” means any entrepreneur or professional who has the seat of his economic activity outside the Community, not having a permanent establishment in the territory of the Community.
- “Member State of identification” means the Member State chosen by the entrepreneur or professional not established in the Community to declare the commencement of his activity as such entrepreneur or professional in the territory of the Community.
- “Member State of consumption” means the Member State in which the rendering of the services is deemed to take place following the provisions of the law governing the common system of value-added tax or its equivalents in the laws of other Member States.
4. Taxation applicable to combat the effects of Covid-19
To combat the political, economic, and social effects of Covid-19 as of May 1, 2021, and valid until December 31, 2021, the 0 percent rate of Value Added Tax will be applied to the goods delivery, imports, and intra-Community acquisitions of goods, whose recipients are public law entities, clinics, hospitals, or private entities of a social nature referred to in Article 17.3 of Regional Law 19/1992, of December 30, 1992, on Value Added Tax. These operations will be documented in the invoice as exempt operations.
Source: Boletín Oficial del Estado 11/08/21
