Learn about the mechanisms for VAT refunds for expenses incurred abroad
The internationalization of businesses means they are incurring expenses abroad with increasing frequency. If a company has an intra-community VAT number, purchases of goods and services from other European Union countries will not be subject to VAT on the invoices. However, if the company does not have an intra-community VAT number, foreign VAT will be applied to the invoices.
Furthermore, there are other expenses that are subject to VAT even if the company has an intra-community VAT number. These are expenses incurred as a result of travel by the business owner or their employees to visit clients abroad, work abroad, attend trade fairs, etc. Among the most common expenses are hotel costs, meals, car rentals, trade fair tickets, etc.
VAT paid abroad cannot be deducted in Spanish VAT returns (form 303). However, it is possible to request a VAT refund using different forms, provided certain requirements and conditions are met.
The refund of VAT paid in other EU member states by Spanish companies, form 360.
Form 360 allows businesses and self-employed professionals based in Spain to claim a refund of VAT paid on purchases or imports of goods or services from other European Union member states. It also allows businesses and self-employed professionals based in the Canary Islands, Ceuta, or Melilla to request a refund of VAT paid on purchases made within Spain.
Form 360 can be filed starting the day after the end of each calendar quarter or calendar year, and the filing deadline is September 30th of the year following the calendar year in which the contributions were incurred. The minimum amount for a quarterly Form 360 claim is €400, while the minimum amount for an annual Form 360 claim is €50.
Form 360 must be submitted electronically through the AEAT website. VAT refund requests must be submitted separately for each EU country where the business has incurred input VAT. Copies of the invoices for which the VAT is being claimed must be attached to the request.
To request a VAT refund, the applicant company must have a Tax Identification Number (NIF), be registered in the Register of Businesses and Professionals prior to submitting the form, have a digital signature (electronic certificate or electronic ID card), and be registered with the DEH (Authorized Electronic Address) through the Electronic Notification Service portal (http://notificaciones.060.es). If the applicant wishes to carry out the procedure through a representative, it is not necessary for the representative to be registered with the DEH or to have an electronic certificate.
VAT refunds for payments made in Spain by non-EU residents, form 361.
Form 361 is a form that allows businesses not established in the territory where the tax applies, nor in the Community, Canary Islands, Ceuta or Melilla, to request a refund of VAT paid on input ...
To request a refund of form 361, the following requirements must be met:
- Appoint in advance a representative residing in Spain who must fulfill the material and formal obligations, be jointly liable in cases of improper refund, and complete and transmit electronically the refund application available at the AEAT.
- Send, in advance, to the national tax management office, a tax certificate from the state where you are established that proves your status as a taxpayer of VAT or similar tax of said state in the period in which the fees for which a refund is requested have accrued.
- The original invoices and other supporting documents for the right to a refund must be kept available to the tax authorities during the tax statute of limitations period.
The application period will begin the day after the end of each calendar quarter or calendar year, and will end on September 30th of the following calendar year in which the fees were incurred.
VAT refunds for expenses incurred outside the EU
It is also possible to recover VAT paid outside the European Union. This requires a reciprocal treatment agreement between Spain and the country where the applicant is established.
Currently, the states with which Spain has reciprocal treatment in terms of VAT refunds are only Switzerland, Norway, Japan, Monaco, Canada, and Israel, although not for all services, so it is necessary to review the agreement with each country according to the resolutions of the General Directorate of the Tax Agency for them.
The only problem is that the VAT refund must be processed directly in the country where it was paid, which can involve lengthy administrative procedures.
Finally, VAT paid in countries outside the EU that do not have this reciprocal agreement with Spain is not eligible for a refund. If you would like further information on the procedure for requesting a refund of VAT paid abroad, please contact us. At Àmbit Assessor, we are experts in national and international taxation and would be happy to assist you.
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A graduate in Business Administration from the University of Barcelona, she continued her education with a Postgraduate Diploma in Accounting and Management Control from Pompeu Fabra University, and completed various courses in tax and fiscal matters offered by the Terrassa Chamber of Commerce, the Barcelona Bar Association, and the Center for Financial Studies. Before joining Àmbit Assessor in 2001 as a tax and accounting consultant, she worked as an administrative assistant at Caixa Manresa and Banc Sabadell and as a tax information call center operator at the Spanish Tax Agency. For three years, she served as treasurer of the L'Alzinar Recreational and Cultural Society, a position she held concurrently with her work at Àmbit Assessor.
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