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The Spanish Tax Agency launches a campaign to request information to collect data on potential DST taxpayers

In February 2021, the Spanish tax agency launched a campaign to request information to collect data on potential DST taxpayers. The purpose of the campaign is to request precise information on the nature of services provided by digital companies, the turnover related to those services, and even the details of the recipients of those services.  The Spanish tax authority aims to have a reliable estimate of corporations liable to DST and of the expected tax collection that according to internal sources, will be higher than the DST collected in France.


The Spanish DST, effective as of 16 January 2021, targets certain digital services – online advertising, marketplaces and data transmission – provided by large multinational companies to users located in Spain. The tax rate levied on those services is 3%.

The DST applies to companies, resident in or outside Spain, that exceed the following two thresholds: (i) net turnover in the previous calendar year exceeds EUR 750 million, and (ii) income from rendering services subject to DST in Spain in the previous calendar year exceeds EUR 3 million. These thresholds are considered at a group level.

A lot of homework in a short time

The Spanish DST involves several obligations which should be carefully analyzed by taxpayers before the first filing period. Initially scheduled for April 2021, on 15 January 2021, the Spanish tax authority announced its postponement to July 2021. The extension of the deadline granted has had an effect of relief on corporations subject to the new tax.

In addition, to grant a longer term to tax departments to adapt their systems to the new tax, this deferment of the first payment is mainly granted because, to date, neither the regulation implementing the DST law, nor the Ministerial Order approving the form for assessing the tax due have been enacted. However, unofficially, sources from the Ministry of Finance set a two-month time limit for having those legal developments in place.

Nevertheless, the deferral on deadline should not make us overlook the fact that DST is in force and, that it will most likely be collected in July this year for the first time (unless it is repealed because an international global solution has been reached within the OECD). Therefore, the Spanish DST applies to digital operations currently being performed, affecting this financial year’s income.

An expressly requested obligation from taxpayers in the draft Regulation is the so-called “descriptive report” including an analysis on operations liable to DST which is necessary for both companies which are subject to the Spanish DST and to the ones which are not, in order to prove they are not subject to the tax.

On the other hand, the determination of revenue basic data for establishing the tax base – may not be easily broken down into the company’s information systems, especially for certain digital services; in addition, for non-EU corporations, neither their accounting principles, nor the currencies will be those ones required for the self-assessment of the Spanish DST, introducing more complexity in the assessment of tax due.

In the same vein, to calculate the tax base, a key element, in addition to the revenue is the location of digital devices (based on IP address). Nevertheless, most of the companies use the IP address of users for commercial purposes only, not for tax compliance. At this point, it is important to not lose sight of the fact that if a DST taxpayer does not prove the existence of internal systems that ensure the location of the devices for DST purposes, it can be punished with a fine of up to 400,000 euros per year.

In that regard, are companies aware of Spanish DST? Are they taking the necessary measures to analyze impact on their profits and take the right decisions to minimize it? Is it worth charging DST to users? And if so, do they have the processes to charge DST to Spanish users in real-time? Are their internal systems ready for DST assessment? Do they know how to deal with all DST obligations? Do they have a forecast of tax due? Are they ready to assess the tax in July 2021 accurately? Do they know how to deal with a request for information from the Spanish tax authority?

A lot of homework in such a short period and time is running out, therefore, action is needed to ensure that the right measures are taken before the deadline. In this situation the assistance of a dedicated and specialized team will speed up the process to successfully overcome this challenge for digital companies.

If you may need further assistance on the implementation of the Spanish DST, please contact our dedicated team at Alier Abogados.

Rafael Villena
Partner of The International Taxation Area

If you would like further information, please do not hesitate to contact our office by calling or by sending an email to

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