VAT treatment on distribution and download movies “online”


Binding tax ruling V0470-17, issued by the Spanish General Tax Sub directorate on February 23rd 2017.

The consultant is a director and co-producer of a movie, established in the Spanish VAT territory that has agreed with a Czech entity a service consisting of the distribution and display of his film, through the platform created by the Czech company on the internet. In consideration, the consultant will receive, from the Czech company, a commission for each viewing of the movie.

With respect to the condition of the consultant (director and co-producer of the movie), as provided in articles 4 and 5 of the Spanish VAT Law, this will have the status of entrepreneur as mandating a set of materials, and personal media with independence and under its responsibility, to develop a business or professional activity by carrying out continuous supplies of goods or supplies of services, assuming the risk that can occur in the development of the activity, provided that they undertake a consideration.

Based on the information provided, the Spanish Tax Authorities understand that the Czech entity intermediates for the distribution and viewing of the movies of the consultant, consisting of such viewing movies online a service provided by electronic means.

With regard to mediation, it is worth mentioning the article 11.Two.15 of the Spanish VAT Law, i.e. it is considered as an intermediary service when the agent acts on behalf of others, on the contrary, if the agent acts on its own name, shall mean that he receives and renders the same service.

At this point, it should be clarified that article 9 bis of the EU regulation 282-2011 of, of 15 March, introduced in this regulatory text, with effect from 1 January 2015, for Regulation (EU) No. 1042 / 2013, of the Council of 7 October, 2013, which establishes that when services are delivered electronically via a portal, it shall be presumed that the taxpayer who takes part in the provision of the service (Czech entity) acts on its own behalf unless the provider (director and co-producer) is expressly recognized as such by that taxpayer and that this is reflected in the contractual arrangements between the parties. Therefore, since it does not give this express recognition, it would be a chain of two different supplies of services carried out by electronic means: the one carried out on its own name by the consultant to the Czech entity assignee of the web platform, and the one performed by the latter, as noted, also in its own name, to end customers.

For the service provided by the Czech entity could be considered as an intermediary service (rendered on behalf of other), it should be that on the receipt or invoice that has been issued or provided to the customer indicated precisely the services provided by electronic means and the provider of these services.

Finally, in terms of the location of the electronic service provided by the consultant to the Czech company, by application of the general rule for so-called B2B, it would not be located within the Spanish VAT territory.

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