On 18 June 2015, the Spanish Central Economic Administrative Court (TEAC) changed its criteria and announced that event organization for third parties that consist of the presentation of vehicles to the press has to be considered an advertising service, not as an organization of commercial fairs and exhibits for third parties.
For B2B services, until 2013, Council Directive 2006/112/EC of November 2006 on the common system of VAT, and Law 37/1992 of 28 December, the VAT Act, established that the place of supply of advertising services shall be the place where the customer has established its business, and the place of supply of organization of commercial fairs and exhibits for third-party services shall be the place where the services are physically carried out. Until 2013 (i.e., before the change in the VAT location rules applicable to the organization of commercial fairs and exhibits), the characterization of certain services as advertising or organization of commercial fairs services was relevant to determine the place of taxation in cases of EU supplies of services.
Spanish law defines advertising services as any promotion service that involves the transmission of a message that will inform its recipient of the existence and characteristics of a product or service in order to increase sales. Also, the Court of Justice of the European Union (CJEU) ruled that advertising services must be uniformly interpreted and concluded that, although the common way to transmit these messages are through words, pictures, texts, press, radio or TV, the message can also be partially or totally transmitted by other means.
The organization of third-party services that include the presentation of vehicles to the press cover events where journalists can physically examine the cars, as well as test drive them. The TEAC thus believes that this is a kind of advertising service that uses a sort of promotion called "below the line." Below the line advertising is a way of communicating with a small group of people through events or special acts, with the aim of promoting the product or service.
Event organization for third parties that consist of the presentation of vehicles to the press has to be considered advertising services, so the place of supply of this kind of service will be the place where the customer has established its business. The same rule has applied since 2013 to the organization of cultural, artistic, sporting, scientific, educational, entertainment or similar activities, including the activities of the organizers of such activities and, where appropriate, ancillary services and with the exception of the access fees to these events.
Nevertheless, this criterion is still relevant for Spanish VAT purposes, due to the existence of the use and enjoyment rule in the Spanish VAT Act, which applies to B2B advertising services located outside the EU, but would not apply to services consisting of the organization of cultural, artistic, sporting, scientific, educational, entertainment or similar activities.