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How Can I Know If I Provide an Electronic Service?

Law and Tax Changes

Electronic service


Globalization in business has made us receive these types of inquiries more regularly than before. And it is really important to determine if the service you are going to provide is an electronic service or not, because it will depend on that, for VAT purposes, whether or not the special electronic services regime applies.

What is an electronic service?

We will start by defining what is considered electronic service:

The services provided electronically will cover the services provided through the Internet that, by their nature, are basically automated and require minimal human intervention, and that do not have feasibility outside of information technology.

Among others we can relate the following (without considering a closed list):

  • Hosting of websites and web pages.

  • Remote maintenance of programs and equipment.

  • Access or download of programs and their update.

  • The provision of images, text, information and the provision of databases.

  • Access or download of music, movies, games, including those of chance or money, online magazines and newspapers, digitized content of books and other electronic publications.

  • Automated distance learning that depends on the Internet to function and does not need human intervention.

  • Internet service packages related to information and in which the telecommunications component is a secondary and subordinate part (service packages that go beyond simple Internet access and that include other elements such as content pages with links to news, meteorological or tourist information, playgrounds, site hosting, access to online discussions, etc.).

The fact that the provider of a service and its recipient communicate by email will not imply, in itself, that the service is considered as a service provided electronically, in this way electronic services will not include, among others:

  • The goods whose order or processing is done electronically.

  • The services of professionals, such as lawyers and financial consultants, who advise their clients by email.

  • Teaching services in which the content of the course is taught by a teacher online (not by videos recorded previously).

  • Telephone help services.

If the service you provide meets these requirements, you are providing an electronic service and you will be included in the special regime for providing electronic services in VAT. And how will it affect you? We explain briefly.

How does it affect you if you provide electronic services?

Your services will be taxed in the Member State of the establishment of the client, whether the client is an entrepreneur or professional or if it is a person who does not have such a condition (final consumer). These are the three cases in which you can find yourself:

  1. 1. Render your service to an entrepreneur from another member state.
  2. The operation is taxed in the state where the client is established or resides, and it will be the client who declares and enters the VAT in his tax administration (investment of the taxpayer).
  4. 2. Provide your service to an end consumer from another member state.
  5. The tax operation in the state where the customer is established or resides, but in this case, you must declare and enter the VAT through the Mini Single Window regime.
  7. 3. Provide your service to an entrepreneur or final consumer from a non-EU country.
  8. This is a non-subject transaction and, therefore, VAT is not applied.


An individual with habitual residence in France downloads a movie through a website of a Spanish company. The Spanish company must include and enter the French VAT. It can choose to register and submit their VAT declarations for these services in Spain through the Mini Single Window service.

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