For logistic, tourism and economic reasons, foreign companies have considered Spain as a very attractive country for organising events, commercial fairs and exhibitions for business purposes. However, what perhaps is less well-known is that there are a series of tax obligations (namely VAT) that foreign companies and entrepreneurs must fulfil in order to carry out these events in Spain.
In this regard, from a VAT perspective, it should be mentioned that the tax obligations arising for the foreign company holding the event in our country would depend on various factors such as determining the type of event in question, this includes ancillary services or the type of client that is attending, i.e. whether it is an individual or an entrepreneur. All these factors will affect to the determination of the applicable VAT location rule, and in the case that the service would be located in Spain, the taxable person shall be required to register, charge VAT and submit the corresponding VAT returns.
For example, according to VAT, there is a service category called “event management” that includes several services such as the assignment of space for organising the event, catering services, lighting, rental furniture, internet, transfer of stands, etc., but it is considered as a unique service applying the same location rule for this complex service. In principle, for B2B cases, this service would be located at the premises of the client.
On the other hand, foreign companies can also render a unique service consisting on selling tickets for accessing to the conference developed in Spain. The provision of this service to foreign entrepreneurs would be located in Spain, being the tax payer and the entity which sells the tickets, which is also required to register, charge the corresponding VAT and submit the VAT returns. This is a very common case for foreign entities that organise a conference in Spain addressed to foreign entrepreneurs.
The content of this post has been sponsored by Diligens Tax Consulting, member of the Spanish Chamber of Commerce in Great Britain. If you would like to find out more about the financial implications of organising a business event in Spain, do not hesitate to visit their website www.diligens.es
Diligens Tax Consulting is also specialised in assisting foreign entrepreneurs in the handling of the VAT refund claim for non-established entities. This issue is usually related to the organisation of events and could be requested by the companies attending the event.