The Spanish Government has finally approved the bill through which several amendments are made to the Spanish VAT legislation. One of these amendments removes the reciprocity requirement needed for foreign VAT refunds claimed by …
The Spanish Government has finally approved the bill through which several amendments are made to the Spanish VAT legislation.
One of these amendments removes the reciprocity requirement needed for foreign VAT refunds claimed by companies established in third countries.
The countries with which Spain has reciprocity arrangements for VAT refund purposes are Canada, Japan, Monaco, Norway, Switzerland and Israel. Companies domiciled in these countries are, in principle, eligible to obtain the refund of VAT paid to their Spanish suppliers on the normal course of their business activities.
As of January 1st 2015, the reciprocity requirement will no longer be required in a certain number of situations. Therefore, companies domiciled in any country (not just in one of countries listed above), have the right to be granted a refund of the Spanish VAT borne.
The situations where the reciprocity requirement is no longer needed are the following:
– VAT paid on access, accommodation, restaurants and transportation as a consequence of the attendance at fairs, congresses and exhibitions with commercial or professional aim (the inclusion of professional events – not just commercial – enormously widens the VAT refund possibilities) .
– VAT on the supply and importation into Spain of moulds and equipment used for the manufacture of goods that will be exported afterwards (this is very common in the manufacture of spare/component parts within the automotive industry).
Fernando Matesanz
Spanish VAT Services
