VAT changes: telecom services, passenger transport and customs deposits

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1. Telecommunications services will generally be taxed where the recipient's head office or permanent establishment is located, with several exceptions when the recipient is not a business or professional. The law also defines what counts as a telecommunications service.
2. Certain raw materials (tin, copper, zinc, nickel, aluminum, lead, silver, platinum and others) leaving special areas or suspension regimes are excluded from operations treated as imports, and a new settlement regime is created for those cases.
3. All passenger transport, whether by land, sea or air, is taxed at the reduced 7% rate, and tolls for motorcycles and passenger cars on highways are treated as passenger transport.
4. A procedure is created so customs agents can recover VAT they paid on behalf of importers who do not reimburse them. If a year passes without reimbursement, the agent may request a refund from Customs within the following three months.
5. Rules on when the tax is due and on invoicing are adjusted for telecommunications services provided from the entry into force of Royal Decree-Lawroyal decree-law A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses. 14/1997, allowing invoices to be corrected and returns to be filed until December 31, 1997.
6. The special regime for agriculture, livestock farming and fishing is amended: waiving it requires a minimum of three years, trading companies and cooperatives are excluded, and in 1998 waiving other tax regimes does not exclude taxpayers from this special regime.

Who it affects

• Telecommunications companies and their customers: The rules for deciding in which country VAT on these services is paid change.
• Customs agents and importers: Agents can recover or request a refund of VAT paid on behalf of the importer.
• Highway concession companies and travelers: Highway tolls are taxed at the reduced 7% rate, lowering the price for users.
• Traders dealing in raw materials listed on foreign exchanges: They avoid financial costs when certain metals and raw materials leave suspension regimes without being taxed as an import.
• Farmers, livestock breeders and fishermen: The rules for applying to and being excluded from their special VAT regime are adjusted.

Words worth knowing

Operaciones asimiladas a las importaciones (operations treated as imports)

Operations that are not strictly imports but are taxed as if they were, for example when goods leave a special customs or tax regime.

Régimen suspensivo (suspension regime)

A situation where VAT payment is postponed while the goods remain under a special customs or tax regime.

Agente de aduanas (customs agent)

A person who acts on behalf of the importer before Customs and may end up paying import VAT out of their own pocket.

Régimen especial de la agricultura, ganadería y pesca (special regime for agriculture, livestock farming and fishing)

A simplified way of applying VAT to holders of agricultural, forestry, livestock or fishing operations.

Empresario o profesional (business or professional)

Someone who regularly carries out economic activities, as opposed to a private consumer.

royal decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries