If your business or self-employed activities occasionally take place outside of Spain, this may involve traveling to visit clients or suppliers located in the European Union. Business trips entail expenses incurred outside of Spain and, often, VAT paid to European tax authorities.
In these cases, you might ask: What will happen to the VAT on the invoices you've received? Is it possible to request a refund, or will you no longer be able to recover it?
To obtain a refund of VAT paid abroad, a comparison is made with the deductibility rules in Spain. In other words, if the expense would have been deductible in Spain on VAT returns filed for expenses paid there, the VAT paid abroad can be recovered by requesting a refund.
On the other hand, if said VAT would not be deductible in Spain, for whatever reason but mainly because it is not possible to justify that expense as necessary for the business activity carried out, it will not be possible to obtain a refund of said VAT paid abroad.
Within the European Union
If your company receives invoices issued in an EU country (with that country's VAT), you can request a VAT refund, but you will only be able to obtain a refund to the extent that the VAT would have been deductible had it been paid in Spain. For example, a hotel bill, car rental, or trade fair entrance fee are business-related expenses, so the VAT paid is deductible.
Attention. Your company may be able to recover the VAT provided that, if incurred in Spain, it would also have been deductible.
Remember that this tax cannot be included as additional VAT paid in the periodic returns filed in our country, as these only include the tax accrued in Spain.
However, this VAT is not lost: you can recover it under the same conditions as if you had paid it in Spain. The deadline to request the refund is September 30th of the following year. Regarding this deadline:
- It is common for companies to assume that the refund request can only refer to annual periods and that it is necessary to wait until the end of the year to make it.
- However, this is not the case: the application can also be made at the end of each quarter.
Submission of the VAT refund application for non-established businesses: Form 360
To request a refund, we will have to submit form 360, mandatory by electronic means (via the internet).
Important: You must not include VAT paid abroad in the quarterly tax returns you file with the Spanish Tax Agency (Form 303), as this form only includes Spanish VAT. You are required to file Form 360.
In form 360, we will provide the supplier's details (name, address, and tax identification number) and the invoice details (date, taxable amount, VAT rate, and description of the expense). We will also attach copies of the invoices.
First quarter. If the amount to be refunded is at least €400, a quarterly application can be submitted. Otherwise, the refund must be requested annually. The minimum annual refund amount is €50. We will submit one application for each country to which the expenses are addressed (those where we have paid VAT). Upon receiving it, the Tax Agency will forward it to the country where the tax was incurred, and that country will process the refund.
Attention. If your company has paid more than €400 in VAT from any EU country during the first quarter of this year, submit your application this April. You don't have to wait until September 2024 to request a refund.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
Do you have any questions about this topic?
Our team of expert advisors will help you resolve any issues related to our services.
Contact us now
A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
Latest entries from MGI Àmbit
(see all)
Related
