Spain: Proposals for regulations to implement the digital services tax

Spain: Digital services tax

A draft Royal Decree that would, in part, implement a regulation for the taxation of digital services was released 3 December 2020 for consultation and public comment.


Related content

The public comment period ends 16 December 2020. While the process for approval of the regulation could take longer, the reduced comment period (seven business days instead of the general period of 15 business days) is driven by a need to expedite completion of the regulatory process. The government's intention apparently is to finalize the regulation within the next 30 days before the 16 January 2021 effective date of the digital services tax.

Concerning the digital services tax, the regulation provides as follows:

  • Registration: Entities subject to the digital services tax and that are not residents of Spain would need to register in the Spanish government’s “census for entrepreneurs and professionals” (Censo de Empresarios, Profesionales y Retenedores) and all entities subject to the digital services tax (both residents and non-residents of Spain) would be required to communicate their status for the digital services tax as well as any modification to that status.
  • Location of user devices: The principal method for determining whether a digital service is provided to persons (users) in Spain is based on the IP address. However, the draft includes a list of sample geo-location protocols that would serve as an alternative to the location based on the IP address, these alternatives include a MAC address, satellite geolocation (GPS, GLONASS, GALILEO or BEIDOU); terrestrial antennas (GSM or LPWAN); or beacons (WiFi or Bluetooth) as well as any combination of existing or future technologies.
  • Requirements and recordkeeping: The recordkeeping requirements under the digital services tax impose an obligation to maintain, conserve, and provide to the tax administration of records of each operation or transaction that allows for the determination of the amount of income and number of users of each type of service provided (e.g., online advertising, intermediation and data transmission). In this register, there is an obligation to identify the customers of the services, by including information such as the customer name, company name, value added tax (VAT) identification number or national tax identification number.

In addition, there would be a requirement to prepare a record (“descriptive memory”) containing the following information:

  • An analysis of the processes, methods, algorithms and technologies used to analyze the tax liability
  • A description of the location methods for each type of service and their attribution to the territory where applied
  • A description of the methods used to calculate the revenue corresponding to each service subject to the tax
  • An identification of the files, programs, and applications used in the previous processes for each settlement period (quarterly)

A draft order regarding tax Form 420 (for self-assessment) was released 15 December 2020 for consultation and public comment. The public comment period ends 30 December 2020. Among other items, the draft order proposes that: (1) Form 420 would have to be file (and the tax paid) during the month following the corresponding calendar quarter, even if no payment would be due; and (2) there would be a possibility of payment by transfer under certain conditions.


The tax on certain digital services was finalized with the publication of Law 4/2020 in the official bulletin on 16 October 2020. The digital services tax has an effective date of 16 January 2021. The rate of the digital services tax is 3%.

Companies that operate globally and have a “significant digital footprint” in Spain will be subject to the digital services tax if two thresholds are satisfied (at the consolidated group level):

  • Net turnover of more than €750 million (globally)
  • Total revenues from taxable provisions of digital services in Spain of more than €3 million

Digital services subject to the tax include online advertising services targeted at users, online intermediary services, and data transmission services. Read TaxNewsFlash

For more information, contact a KPMG tax professional in Spain:

Carlos Guerrero Ros | +34 91 456 34 00 | 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal