If you've spent a few days abroad visiting clients, what happens to the VAT on the invoices you received? Is it possible to request a refund, or is it no longer recoverable? Since the expenses were incurred abroad, you cannot deduct the VAT paid outside of Spain on your Spanish tax returns. However, you can request a refund, although this is subject to certain conditions. To request a refund, you must submit form 360, the deadline for which is September 30th of the year following the year to which the invoice corresponds.
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 or abroad. 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.
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.
Businesses or professionals established in the Canary Islands, Ceuta or Melilla will submit the application for refund of the fees paid in the Peninsula or in the Balearic Islands through this same form.
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.
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 expenses are being paid (those where we have incurred VAT-taxable expenses).
The filing period begins once the quarter or year to which the request refers has ended, and ends on September 30th of the following year. Therefore, the deadline to request a refund of VAT paid during 2021 is September 30th.
Outside the European Union
VAT paid in countries outside the European Union can also be recovered, provided there is a reciprocal agreement with Spain. Currently, agreements exist with Canada, Japan, Monaco, Switzerland, Israel, and Norway, among others. Some of these countries have limited the refund agreement depending on the transaction. The process is handled directly with the country where the tax was paid.
You can contact this professional office for any questions or clarifications you may have.
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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