The Spanish Economic Administrative Court released a decision on 18 September 2019 (Rec. 6309/2018) in a case that involved VAT returns for the 3rd and 4th quarters of 2008 that were submitted by the taxpayer on 18 May 2015. This date was the date on which the taxpayer exercised its right to deduct input VAT.
The court ruled that in accordance with the Spanish Tax legislation, the statute of limitations applicable to the right of an interested party to request a refund of the VAT for the 4th quarter of 2008 began on 1 February 2009. Because the applicable limitation period is four years, as of 1 February 2013 the right to request a refund must be considered expired, given that there was nothing that would have caused the limitation clock to stop running.
Moreover, the VAT regulations require that the right to the deduction must be exercised in the VAT return relating to the period of assessment in which the taxpayer has incurred the deductible VAT, or in a return that’s submitted within the four-year limitation period. The regulations also permit the excess of the amount of deductions claimed with respect to the VAT incurred to be refunded within four years of the filing of the VAT return in which that excess originated. Any excess not claimed within that period is considered to have expired.
Consequently, the VAT Law requires that there be timely submission of the VAT return and the compensation or request for a refund must be made within a period of four years from the time the return where the right to the deduction was filed.
David Sardá
david.sarda@bdo.es
Verònica Targa
veronica.targa@bdo.es