International Tax Advisory: The effects of Brexit on service companies

The keys to good tax advice for companies in the face of the effects of Brexit

Since February 1st, the United Kingdom has not been part of the European Union, causing the so-called European Brexit. Given this, there have been a series of effects between the Member States that will last throughout the transition period of this movement.

Consequently, the European Commission has decided to publish a series of documents with the keys to face the closing of agreements between territories. In the Spanish case, there has been a serious impact on the Value Added Tax (VAT) related to the provision of services.

Among the most notable effects are:

  • Increase in the bureaucratic and fiscal cost of the services provided from Spain to British clients that operate, directly or indirectly, in the Spanish market.
  • Certain services, such as technical assistance, consulting or management services, transfers of personnel or advertising, among others, may be subject to VAT in Spain.
  • Companies that provide subscription services to digital, telephony or distance training platforms, among others, from Spain, must register in the United Kingdom and pay VAT there, in accordance with the provisions of British regulations.
  • These services will generate the right to deduction, and these entities may have a lower cost thanks to the increase in the prorated deduction of input VAT.

B Law & Tax
International Tax & Legal Advisors.

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Etiquetas: Brexit, international tax advice, international tax advisor, Value Added Tax, European Union, Service companies